Cookies 'n Cream, Incorporated, recently issued new securities to finance a new show. The project cost $14.1 million and the company paid $735,000 in flotation cos addition, the equity issued had a flotation cost of 7.1 percent of the amount ra whereas the debt issued had a flotation cost of 3.1 percent of the amount raised. I company issued new securities in the same proportion as its target capital struc what is the company's target debt-equity ratio? (Do not round intermediate calculat and round your answer to 4 decimal places, e.g., 32.1616.)

Cookies 'n Cream, Incorporated, recently issued new securities to finance a new show. The project cost $14.1 million and the company paid $735,000 in flotation cos addition, the equity issued had a flotation cost of 7.1 percent of the amount ra whereas the debt issued had a flotation cost of 3.1 percent of the amount raised. I company issued new securities in the same proportion as its target capital struc what is the company's target debt-equity ratio? (Do not round intermediate calculat and round your answer to 4 decimal places, e.g., 32.1616.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $80 million of 8% bonds, dated January 1, on January 1, 2016. Management has the positive intent and ability to hold the bonds until maturity. For bonds of similar risk and maturity the market yield was 10%. The price paid for the bonds was $66 million. Interest is received semiannually on June 30 and December 31. Due to changing market conditions, the fair value of the bonds at December 31, 2016, was $70 million. Required: 1. Prepare the journal entry to record Fuzzy Monkey’s investment on January 1, 2016. 2. Prepare the journal entry by Fuzzy Monkey to record interest on June 30, 2016 (at the effective rate). 3. Prepare the journal entry by Fuzzy Monkey to record interest on December 31, 2016 (at the effective rate). 4. At what amount will Fuzzy Monkey report its investment in the December 31, 2016, balance sheet? Why? 5. How would Fuzzy Monkey’s 2016 statement of cash flows be affected by this investment?
Ivanhoe Company purchased $324000 of bonds for $339000. If Ivanhoe intends to hold the securities to maturity, the entry to record the investment includes O a debit to Debt Investments at $324000. O a credit to Premium on Debt Investments of $15,000. O a debit to Debt Investments at $339000. O none of these choices are correct.

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