Company X pays interest to the amount of R1 500 a year on total liabilities of R10 000. It can also issue bonds with a YTM of 12%. What will the relevant before tax cost of debt be when calculating that WACC for the company? a. 18% b. 12% c. 15% d. 8%

Q: Compute for the net increase or decrease in the carrying amount of the bonds from June 30,2022 to…

A: Given in the question:Face Value of Bonds₱5,00,000Maturity5 YearsCoupon Rate12%Interest is paidSemi…

Q: Bond interest payments before and after taxes Charter Corp. has issued 2,408 debentures with a total…

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Q: A P1000 000.00 issue of 3%, 15-year bonds is sold at 95% The miscellaneous initial expense of the…

A: Par value = P1000,000 Percentage at which sold =95% Initial cost = P20,000 coupon rate =3% Yearly…

Q: 3. Jones Cricket Institute issued a 30 year, 8 percent semi-annual bond 3 year ago. The bond…

A: Solution- (a) the pre-taxed cost of debt is its yield to maturity (YTM)  Assume that Face value or…

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A:

Q: For the given corporate bond, whose annual simple interest rate is provided, find the semiannual…

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Q: Atlantic Corp needs to issue Bonds to raise money with standard par value. Corporation is going to…

A: Given: Amount to be raised = $2,019,331,015 Interest rate = 5% Tax rate = 40%

Q: Tom Fong Music Inc., has an outstanding bond callable at $1,340. The total value of the bond is $100…

A: Bonds that can be called anytime before maturity are known as callable bonds. Yield to maturity is…

Q: If a corporation has an average tax rate of 30 percent, what is the approximate after cost of debt…

A: Tax rate = 30% Bond price = P1120 Par value = P1000 Coupon rate = 12% Coupon amount = 1000*0.12 =…

Q: Amount issued Offered $340 million Issued at a price of 100.00% plus accrued interest (proceeds to…

A: Format:-   Price of Bond  + Accrued Interest From 1 June to 15 June  Amount to be paid  %

Q: At the present time, Andalusian Limited (AL) has 20-year noncallable bonds with a face value of…

A: The before-tax cost of bonds or debt funds is the annualized amount that is paid to the lenders that…

Q: Sheridan Industries has 8 percent coupon bonds outstanding. These bonds have a market price of…

A: Compound = semiannually = 2 Coupon rate = 8 / 2 = 4% Price of bond = pv = $990.67 Time = nper = 6 *…

Q: P9-4 Cost of debt using the approximation formula For each of the following $1,000-par- value bonds,…

A: Yield to maturity (YTM) is the discount rate i.e. rate of return that a bond provides to its…

Q: 11

A: YEILD TO MATURITY  (YTM)=7% TAX RATE = 40% EFFECTIVE COST OF DEBT =  YTM*(1-TAX RATE)

Q: Bond interest payments before and after taxes Charter Corp. has issued 1,719 debentures with a total…

A: The interest rate on the debenture is calculated on the face value.  The company gets a tax benefit…

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Q: USA Manufacturing issued 7.5 percent semiannual bonds 6 years ago. The bonds currently sell at…

A: The after-tax cost of debt is the YTM adjusted for tax.

Q: j) If they use effective interest amortization, how much of the discount (or premium) will they…

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Q: In January 1 20x1 abc company issued a 1000000 10 year bond with a stated interest rate of 9%…

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Q: Assume that Company A wants to borrow $500,000 by issuing 100 10-year, $5,000 bonds. The interest…

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A: A bond with a notional principal amount is only used to pay the annual interest as per the interest…

Q: None

A: Par Value =1000Number of Periods =20*2 =40Semi annual coupon =12.1%*1000/2 =60.5a. PV of bond price…

Q: (Cost of debt) Carraway Seed Company is issuing a $1,000 par value bond that pays 7 percent annual…

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Q: Ravi Ltd. issued 1,000, 10% Debentures of Rs. 100 each redeemable after 10 years. The tax rate is…

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Q: A company issues GHS 1,000,000 12% debentures of par value of GHS 100 each. The debentures  are…

A: There is an inverse relation between the interest rate and the prices. If the prices are higher then…

Q: Zeeb LLC has 12% perpetual debt of OMR 120,000. The tax rate is 50%. Calculate Kd? a. 10% b. 6%…

A: Interest rate = 12% Tax rate = 50% Value of debt = OMR 120,000

Q: The company has a P1,000 par value bond outstanding with 25 years to maturity. The bond carries an…

A: Annual interest payment = P88 Maturity value = P1,000 Tax rate = 0.30 Current price = P925 Maturity…

Q: Compute for the approximate after tax-cost of debt.

A: Part-1   The after-tax cost of debt is the interest paid on debt less any tax savings due to claim…

Q: (Cost of debt) Temple-Midland, Inc. is issuing a $1,000 par value bond that pays 8.2 percent annual…

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Q: Pearson Co issue its $154,000 at a price of 97, the stated rate is 6%, the bond term is 4 years, and…

A: Face Value of Bonds = $154000 Issue Value of Bonds = $154000 * 97% Issue Value of Bonds = $149380…

Q: A company has issued 10-year bonds, with a face value of $1,000,000, in $1,000 units. Interest at 8%…

A: A coupon bond is a bond that pays fixed interest payments in return to the bondholders till the…

Q: PB4. LO 13.2 Irving Inc. sold bonds with a $50,000, 10% interest, and 10-year term at $52,000. What…

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Q: A Corporation believes that it can sell long term-bonds with an 8% coupon rate, although the…

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Q: e-Midland, Inc. is issuing a ​$1,000 par value bond that pays 7.5 percent annual interest and…

A: After tax cost of bond is the yield to maturity of bond that is rate of return realized on the bond…

Q: Calculate the pre-tax cost of debt for a company that sold 10-year 8% bonds 3 years ago if they are…

A: Pre tax cost of debt has to be found. The debt is in the form of a bond. So, the yield to maturity,…

Q: Shanken NV issued a 20-year, 12 percent semiannual bond 5 years ago. The bond currently sells for…

A: The after-tax cost of debt is its yield to maturity (YTM) adjusted for taxes. The YTM is the…

Q: Irredeemable bonds were issued at 103 but registration and other fees amounted to 5% of issue price.…

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Q: A.When market rate of interest was 12%, Joshkin Corporation issued $1,000,000 11%, 10-year bonds…

A: Year Present Value Factor @ 12% 1 0.8929 2 0.7972 3 0.7118 4 0.6355 5 0.5674 6 0.5066…

Q: arch 1, 2014, Khale Il mature on March valent to the marke ow much interest ex that is the balance a…

A: Coupon Rate: The coupon rate is charged on the face value of the bond. The coupon can be paid…

Q: Shanken Corp. issued a 30-year, 6.2 percent semiannual bond 7 years ago. The bond currently sells…

A: Using rate function in excel

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A: Given: Years = 4 Face value = $1,000 Present value = $800

Q: (Cost of debt) Belton Distribution Company is issuing a $1,000 par value bond that pays 7.0 percent…

A: Par value = $ 1000 Coupon rate = 7% Semi annual coupon amount = 1000*0.07/2 = $ 35 Years to maturity…