Target Inc. has a $100 million debt and $500 million equity and is being bought out by a private equity fund in an LBO transaction. The PE fund will pay $700 million to buy out the target firm's existing equity, funded by 550 million of new debt and 150 million of equity investment. As a bondholder of Target Inc., which of the following is most likely to happen the value of your bond? O Increase O Decrease

JJ. 182.

An investor in the 22 percent tax bracket is trying to decide which of two bonds to select: one is a 5.5 percent U.S. Treasury bond selling at par, the other is a municipal bond with a 4.25 percent coupon, which is also selling at par. Which of the two bonds hould the investor select? Why?

39. Wanda Maximoff has been asked to compare the YTM of a zero-coupon bond that is currently being sold for $565 to the YTM of a 5.0% corporate bond that makes semiannual coupon payments and is currently priced at $1,028. Both bonds have 12 years remaining. Which bond should Wanda recommend for purchase? [Hint: You must use semiannual compounding for both bonds in your comparison.] OA Buy the zero coupon bond because the YTM is greater at 2.41% compared to the YTM of the corporate bond at 2.35%. OB. Buy the zero coupon bond because the YTM is greater at 4.87% compared to the YTM of the corporate bond at 4,69%. C. Buy the zero coupon bond because the YTM is greater at 4.82% compared to the YTM of the corporate bond at 4.69% O D. Buy the zero coupon bond because the YTM is greater at 4.69% compared to the YTM of the corporate bond at 4.53%. OE. Buy the zero coupon bond because the YTM is greater at 4.82% compared to the YTM of the corporate bond at 2.35% 0

You invest in a mutual fund that charges a 3% front-end load, 1% total annual fees, and a 0% back-end load on Class A shares. The same fund charges a 0% front-end load, 1% total annual fees, and a 2% back-end load on Class B shares. What are the total fees in year 1 on a Class B investment of $20,000 if you redeem shares with no growth in value? $600 $902 $596 $885

Please help. Assume that Almond Milk Company has a $1,000 face value bond with a stated coupon rate of 7.31 percent that is convertible into its common stock at $35.75. The bond is selling at $1,098.14 in the market. The common stock is selling for $33.01 and pays a dividend of 1.34 per share. Calculate the payback premium period. My teacher got 7.29 as the right answer, but I don't know how she got there

Suppose that a firm has 5 bondholders each expecting to be paid today their principal of $1 million each. The firm is in default, as its going-concern value is only $3 million, falling short of the $5 million to be repaid. The firm could liquidate and sell all of its assets for a value of $1 million, so that each bondholder would recover $200,000 on their claim. The firm offers its bondholders a debt-for-equity swap, but four of out the five bondholders must participate and become equityholders for the swap to succeed. In the table below, calculate the "lower bound" payoff if only four bondholders participate and the "upper bound" payoff if all five bondholders participate. The correct answer is lower bound=$500,000 and upper bound=$600,000