Blue Sky Corporation is planning to issue $1,000 par value bonds. The bonds will have a coupon rate of 14 percent and will be sold at a market price of $1050. Flotation costs will amount to 6 percent of market value. The bonds will mature in 15 years and nterest payments will be made semi-annually. The company's marginal tax rate is 21%. What is the firm's after-tax cost of debt financing?

I draw 5 cards from a deck (replacing each cardimmediately after it is drawn). I receive $4 for each heartthat is drawn. Find the mean and variance of my total payoff.

You are a corn producer. Today, May 1, you have planted corn and you expect a crop of over 1,500,000 bushels. You would like to sell the crop soon after the October harvest. You are fairly certain that prices are heading down, so you want to lock in a price for December delivery. The performance bond deposit of $1,000.00 per contract and possible performance bond calls will not cause you a cash-flow problem. You decide to sell three hundred December corn futures contracts (5,000 bushels each, or 1,500,000 bushels).   The December futures price today is $5.6125 and the local forward cash for December is $5.2125. Brokerage fees for each contract is $25.00 round-turn. In December, futures prices have fallen to $5.6000 and cash prices to $5.2000. Date Cash Market Futures Market Basis May         December         Results         In May do you take a long or short position in the futures market? In December, what do you do in the futures market?…

What is the main reason lenders pay borrowers' property taxes through a pre-paid escrow account? It prevents a tax lien from being applied to the home. The tax lien would be senior to the mortgage lien. It prevents the borrower from refinancing with another lender because they would lose all of their escrow funds. It allows the lender to earn interest on the pre- paid tax money as itsits in the account. It allows the lender to take advantage of corporate tax deductions.