Solve it using formulas, no tables correct answers are: i) i^2=0.063977 > 0.0536 iii) Po= £91,630.9 iv) i' 0.028985 = 2.9% pa A company that pays tax at the rate of 25% on income and 30% on capital gains is considering purchasing a bond at a price that would ensure a net redemption yield of at least 6.5% per annum. A bond of nominal value £100,000 which pays half-yearly coupons of 7.5% per annum in arrears is available. It is redeemable at 105% at the option of the borrower on any coupon payment date between 15 and 20 years (inclusive) after the date of purchase. (i) Determine whether or not the company would make a capital gain if the bond is purchased and is held until redemption. (ii) Explain how your answer to part (i) influences the assumptions made in calculating the maximum price that the company should pay for the bond for the given target net redemption yield. (iii) Calculate the maximum price that the investor should pay. (iv) The annual rate of inflation expected by the company over the period during which the stock is held is 3.5% per annum effective. Calculate the minimum real annual effective rate of return which the company can expect to obtain on this investment to the nearest 0.1%.

Wavering Plc is trying to decide on what discount rate to use when appraising future capital investment options. It is currently financed by a mixture of debt and equity, detailed as follows:                              Book value                                                                           £000s 1 million £1 ordinary shares                                                1,000 Retained earnings                                                                 1,5007500 8% Pref. Share of £100 each                                        75012,500 £100 6.4% irredeemable debentures                  1,250 Mortgage at 10% interest rate (secured on premises)     250 The market price of ordinary shares is £3.00, and the debentures have a market price of £80. The company pays corporation tax at a rate of 30%. The current return on government securities is 5%, the average stock market rate of return is 9% and the company has a beta value of 1.6. The management is considering taking…

Consider a simple firm that has the following market-value balance sheet: Assets Liabilities end equity $1 040 Debt Equity $400 640 Next year, there are two possible values for its assets, each equally likely: $1 180 and $960. Its debt will be due with 4.9% interest. Because all of the cash flows from the assets must go to either the debt or the equity, if you hold a portfolio of the debt and equity in the same proportions as the firm's capital structure, your portfolio should earn exactly the expected return on the firm's assets. Show that a portfolio invested 38% in the firm's debt and 62% in its equity will have the same expected return as the assets of the firm. That is, show that the firm's pre-tax WACC is the same as the expected return on its assets. If the assets will be worth $1 180 in one year, the expected return on assets will be %. (Round to one decimal place.)

only looking for parts c-1 and c-3

which option is correct

Please answer ASAP

Calculate the aftertax cost of debt under each of the following conditions. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.) raw C. Yield 8.0% 8.6 % 6.5 % Corporate Tax Rate 22 % 25 % Aftertax Cost of Debt % % %

Marcus Inc., a manufacturing firm with no debt outstanding and a market value of $100 million is considering borrowing $ 40 million and buying back stock. Assuming that the interest rate on the debt is 9% and that the firm faces a tax rate of 21%, answer the following question: Estimate the present value of all future interest tax savings, assuming that the debt change is permanent. Group of answer choices a. 21m b. 8.4m c. 0.756m d. 1.89m