ROFL Limited has asked you to calculate the debt component to help in its calculation of its weighted average cost of capital (WACC). ROFL has 2,000 Corporate Bonds outstanding with a face value of $49,000 each. The coupon rate is 4% pa. compounding semi-annually. The bonds mature in 12 years and currently ROFL bonds are trading in the market at a yield of 7%p a. If a coupon payment was paid today what is the total market value of ROFLS issued bonds? Provide your answer to the nearest dollar.

ROFL Limited has asked you to calculate the debt component to help in its calculation of its weighted average cost of capital (WACC). ROFL has 2,000 Corporate Bonds outstanding with a face value of $49,000 each. The coupon rate is 4% pa. compounding semi-annually. The bonds mature in 12 years and currently ROFL bonds are trading in the market at a yield of 7%p a. If a coupon payment was paid today what is the total market value of ROFLS issued bonds? Provide your answer to the nearest dollar.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter11: Determining The Cost Of Capital

Section: Chapter Questions

Problem 16P

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