The coupon rate on an issue of debt is 9%. The yield to maturity on this issue is 11%. The corporate tax rate is 32%. What would be the approximate after-tax cost of debt for a new issue of bonds? (Round your answer to 2 decimal places.)
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- The yield to maturity is 10%. The.corporate tax rate is 31%. What would be the approximate after-tax cost of debt for a new issue of bonds? O 5.28% O 248% O 6.90% O 3.14%Question 3: Answer the following Two questions: (CLO-3) I. You would like to purchase a Treasury bill that has a $10,000 face value and is 68 days from maturity. The current price of the Treasury bill is $9,875. Caleulate the discount yield on this Treasury bill. Answer 2. a) What are the differences among T-bills, T-Note, and T-bonds? Answer:Mf2. Suppose in Month 1 the yield on ten-year bonds issued by the government in a country was 1.8% (also the coupon rate). In the following Month 2, the yield was 2.3%. Predict the effect of these changes in yield on the price of the ten-year government bonds, assume a face value, 1000. You will need to calculate the duration, modified duration, convexity and clearly explain your results.
- B) Suppose an IAB with a face value of RM3,000,000.00 is sold at a discount rate of 5 percent and has 42 days remaining to maturity. What is the price for this IAB? Suppose that the interest rate on a taxable corporate bond is 9% and that the marginal tax is 28%. Suppose a tax-free municipal bond with a rate of 6.75% was available. Which security would you choose? D) Suppose you can invest in a money market security that matures in 75 days and offers a 3% nominal annual interest rate (i.e., bond equivalent yield). What is the effective annual interest return on this security? E) If the Malaysian price level rises by 6% relative to the price level in the United States, what does the theory of Purchasing Power Parity predict will happen to the value of the Malaysian ringgit in term of Dollars?If corporate bonds are traded 4% above the government bond rate of 8% and the recovery rate on default loans is 50%. What is the probability that the borrower of this loan will default on its repayment? CK The outstanding debt of Berstin Corp. has eight years to maturity, a current yield of 9%, and a price of $80. What is the pretax cost of debt if the tax rate is 30%. A. 7.5% B. 10.8 % OC. 6.5 % OD. more information needed
- Suppose a U.S. government bond promises to pay $2.249.73 three years from now. If the going interest rate on 3-year government bonds is 4%, how much is the bond worth today? PV = FV,/1 + 1NWhat are the market interest rate on Coleman's debt and its component cost of debt? Coupon rate= 12% Coupons per year = 2 Years to maturity = 15 Price = $1,153.72 Tax rate = 40% The Market interest rate of debt is 10% (5% * 2) , Can you give me a step by step computation (manually) of the 5% rate? Thank you so much!Suppose a U.S. government bond promises to pay $3.000 four years from now. If the going interest rate on 4-year government bonds is 5%. how much is the bond worth today? PV = FV /1 + 1N
- What should be the coupon rate on the new bond issue? Round your answer to one decimal place. _______ % What is Global's after-tax cost of debt? Round your answer to one decimal place. _______ %Cost of debt with fees. Kenny Enterprises will issue a bond with a par value of $1,000, a maturity of twenty years, and a coupon rate of 10.8% with semiannual payments, and will use an investment bank that charges $30 per bond for its services. What is the cost of debt for Kenny Enterprises at the following market prices? a. $931.44 b. $1,013.16 c. $1,102.27 d. $1,152.27 ..... a. What is the cost of debt for Kenny Enterprises at a market price of $931.44? |% (Round to two decimal places.)Suppose that discount bond prices are as follows: 2 3 4 P. 0.9525 0.899 0.838 0.760 0.05 0.065 0.054 0.070 A customer would like to have a forward contract to borrow $20M two years from now for one vear. Can you (a bank) quote a rate for this forwardloan? Question 15 Your investment account earned 10.8% last year, inflation was 6.0% for last year. What was the real return on your account last year?
