Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds arelisted in the following table. If the corporate tax rate is 32 percent, what is the aftertax cost of Ying's debt?Bond1234Coupon Rate Price Quote1021091011166.3%76.17.24.24%3.88%3.84%5.94%4.04%Maturity4 years9 years22 years35 yearsFace Value$ 16,000,00040,000,00040,000,00058,000,000

Bonds are debt securities issued by governments and private companies to raise funds from the…

Answered: Ying Import has several bond issues…

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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Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. If the corporate tax rate is 32 percent, what is the aftertax cost of Ying's debt? Bond Coupon Rate Price Quote Maturity Face Value 1 6.1% 104 4 years $17,000,000 234 7.2 111 7 years 38,000,000 6.3 104 16 years 46,000,000 7.3 115 26 years 58,000,000
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the table below. Bond Coupon Rate Maturity Face Value. $ 8.60% 6.90 8.30 8.80 3 Aftertax cost of debt Price Quote 105.1 95.3 103.9 105.8 % 6 years 9 years 16.5 years 26 years If the corporate tax rate is 21 percent, what is the aftertax cost of the company's debt? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. 21,000,000 41,000,000 46,000,000 61,000,000
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the table below. Bond 1 2 1234 3 Coupon Rate 8.90% 6.90 8.60 9.10 Aftertax cost of debt Price Quote 106.4 94.0 105.2 95.0 % Maturity 3 years 6 years 13.5 years 23 years If the corporate tax rate is 24 percent, what is the aftertax cost of the company's debt? Note: Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Face Value $ 23,000,000 35,000,000 40,000,000 55,000,000
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. Coupon Bond Rate Price Quote 1234 Maturity Face Value 6.4% 106.36 6 years 44,000,000 7.9 114.92 9 years 39,000,000 7.6 113.47 16.5 years 59,000,000 7.2 102.71 26 years 66,000,000 If the corporate tax rate is 24 percent, what is the aftertax cost of the company's debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of debt %
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the table below. Coupon Rate Maturity Face Value $ 8.90% Bond 1 2 3 6.80 8.60 9.20 Aftertax cost of debt Price Quote 106.8 93.4 105.8 96.5 % 4 years 6 years 14.5 years 25 years If the corporate tax rate is 25 percent, what is the aftertax cost of the company's debt? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. 28,000,000 31,000,000 36,000,000 55,000,000
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the table bel If the corporate tax rate is 22 percent, what is the aftertax cost of the company's debt? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Aftertax cost of debt
Atom Endeavour Co. Issued $27 million face amount of 5.6% bonds when market Interest rates were 6.24% for bonds of similar risk and other characteristics. Required: a. How much Interest will be paid annually on these bonds? (Enter your answer in dollars, not millions of dollars, 1.e. 1,234,567.) Annual interest payment b. Were the bonds issued at a premium or discount? O Premium O Discount c. Will the annual Interest expense on these bonds be more than, equal to, or less than the amount of Interest paid each year? O Interest expense will be less than the Interest paid. O Interest expense will be more than the Interest paid. O Interest expense will be equal to the Interest paid.
Ying Import has several bond issues outstanding, each making semiannual Interest payments. The bonds are listed in the following table. If the corporate tax rate is 31 percent, what is the aftertax cost of Ying's debt? (Do not round your intermediate calculations.) Bond Coupon Rate Price Quote 102 111 103 116 1234 4 6.3% 7 6.1 6.8 4.19% 5.78% 3.79% 3.83% 3.99% Maturity 7 years 12 years 21.5 years 32.5 years Face Value $ 21,000,000 40,000,000 47,000,000 58,000,000
Atom Endeavour Co. issued $48 million face amount of 12.0% bonds when market interest rates were 13.38% for bonds of similar risk and other characteristics. Required: a. How much interest will be paid annually on these bonds? (Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.) Annual interest payment b. Were the bonds issued at a premium or discount? O Premium O Discount c. Will the annual interest expense on these bonds be more than, equal to, or less than the amount of interest paid each year? O Interest expense will be less than the interest paid. O Interest expense will be more than the interest paid. O Interest expense will be equal to the interest paid.
Here are data on $1,000 par value bonds issued by Microsoft, GE Capital, and Morgan Stanley Assume you are thinking about buying these bonds Answer the following questions a. Assuming interest is paid annually, calculate the values of the bonds if your required rates of return are as follows Microsoft, 7 percent, GE Capital, 15 percent, and Morgan Stanley 10 percent where 0 b. The bonds are selling for the following amounts Microsoft GE Capital Morgan Stanley $850 $738 $561 What are the expected rates of return for each bond? c. How would the value of the bonds change it (1) your required rate of notumn (r) increased 2 percentage points or (2) decreased 2 percentage points? d. Explain the implications of your answers in part (c) in terms of interest rate nsk, premium bonds, and discount bonds e. Should you buy the bonds? Explain a. If your required rate of return on the Microsoft bond is 7 percent, what is the value of the bond? (Round to the nearest cont) Review Coupon interest rate…
Cote Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. Bond 1 2 3 4 Coupon Rate 7.50 % 9.00 8.70 8.30 Cost of debt Price Quote 103.48 110.80 110.15 103.05 Maturity 5 years 8 years % 15.5 years 25 years If the corporate tax rate is 34%, what is the after-tax cost of the company's debt? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Face Value $ 45,000,000 40,000,000 50,000,000 65,000,000
Reynolds Co. ISsued $87 million face amount of 11.00% bonds when market interest rates were 10.90% for bonds of similar risk and other characteristics. Required: 0. How much interest will be paid annually on these bonds? (Enter your answer In dollars, not milons of dollars.) b. Were the bonds issued at a premium or discount? c. Will the annual Interest expense on these bonds be more than, equal to, or less than the amount of interest paid each year? a Annual interest payment b. Bonds issued C. Annual interest expense will be

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