Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the table below. Coupon Rate 8.60% Face Value $ 26,000,000 46,000,000 51,000,000 66,000,000 Bond 1 2 3 6.80 8.30 8.80 Aftertax cost of debt Price Quote 105.6 94.8 104.4 106.3 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. 6.53 % Maturity 6 years 9 years 16.5 years 26 years
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- The Excel file Immunization Using Individual Bonds contains information about three bonds. Use this data to: Yield to maturity (Expected/Current) 7% Number of Years to Future Liability 8 Future Liability $ 3,000.00 Bond 1 Bond 2 Bond 3 Coupon rate 8.00% 9.000% 7.00% Maturity 9 24 15 Face value 1,000 1,000 1,000 Explain which bond you prefer to use to attempt to immunize this obligation which is due in 8 years. Analyze each bond’s performance in attempting to achieve immunization Please show work in excel and functions/equations used.Assume bonds payable are amortized using the straight-line amortization method unless stated otherwise. Pricing bonds Bond prices depend on the market rate of interest, stated rate of interest and time. Requirements Compute the price of the following 8% bonds of Country Telecom. $100,000 issued at 75.25 $100,000 issued at 94.50 $100,000 issued at 103 50 $100,000 issued at 94.50 $100,000 issued at 103.25 2. Which bond will Country Telecom have to pay the most to retire at maturity? Explain your answer.S14-4 Pricing bonds Bond prices depend on the market rate of interest, stated rate of interest and time. Requirements 1. Compute the price of the following 8% bonds of Country Telecom. a. $100,000 issued at 75.25 c. $100,000 issued at 94.50 b. $100,000 issued at 103.50 d. $100,000 issued at 103.25 2. Which bond will Country Telecom have to pay the most to retire at maturity: Explain your answer.
- Consider the following figure which shows the relationship between a three-year bond's price (vertical axis) and the passage of time (measured in years - horizontal axis). $106.000 $104.000 $102.000 $100.000 $98.000 $96.000 $94.000 594.846 0.00 S96.688 598.567 0.50 Bond Price as Time Passes $100.4 1 $102.433 $96.433 1.00 $98.307 $100.217 1.50 $102.13 58148 2.00 Which of the following statements are consistent with the figure above? $104.148 $100.055 $106.000 $101.99 250 $103.980 This pattern of prices is consistent with a bond whose yield to maturity is below the band's coupon rate. This bond pays a coupon of $8. This bond pays coupons on an annual basis. None of the other statements are correct. 100Kingbird Ltd. issued a $778,000, 10-year bond dated January 1, 2023. The bond was sold to yield 12% effective interest. The bond paid 10% interest on January 1 and July 1 each year. The company's year-end was December 31, and Kingbird followed IFRS. Using 1. factor Tables 2. a financial calculator, or 3. Excel function PV, calculate the amount received for the bond, and any discount or premium on the bond. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ORDINARY ANNUITY OF 1. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to O decimal places e.g. 58,971.) Proceeds from sale of bond on bond Prepare the journal entries for above transactions. (Round answers to O decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the…5 On January 1, Ruiz Company issued bonds as follows: Face Value: Number of Years: Stated Interest Rate: Interest payments per year 7 B 9 0 1 2 AWN IC $500,000 a) Required: 1) Calculate the bond selling price given the two market interest rates below. Use formulas that reference data from this worksheet and from the appropriate future or present value tables (found by clicking the tabs at the botto this worksheet). Note: Rounding is not required. 15 7% 2 Annual Market Rate Semiannual Interest Payment: PV of Face Value: +PV of Interest Payments: Bond Selling Price: Annual Market Rate Semiannual Interest Payment: PV of Face Value: +PV of Interest Payments: = Bond Selling Price: 9% $17,500 133,500.01 285,055.55 418,555.56 6.00% $17,500 205,993.38 5343,007.72 $549,001.10 +
- KC Corporation issued bonds with a total par value of $100,000 on 1/1/20x1. The following loan amortization schedule was developed for these bonds:. Year 20x1 20x2 20x3 20x4 Column Totals Beginning Carrying Value 96,613 97,376 98,192 99,065 Interest 6,763 6,816 6,873 6,935 27,387 Cash 6,000 6,000 6,000 6,000 24,000 Amortization 763 816 873 935 3,387 Based upon the above information, Assume instead of refunding the bonds on January 1, 20X4, that the company is unable to make the payment for the maturity value and for the final interest payment at the end of the bond term. Investors agree to accept instead, a four year non-interest bearing note for 103,000. Record the troubled. debt restructure on the books of the debtorKC Corporation issued bonds with a total par value of $100,000 on 1/1/20x1. The following loan amortization schedule was developed for these bonds:. Year 20x1 20x2 20x3 20x4 Column Totals Beginning Carrying Value 96,613 97,376 98,192 99,065 Interest 6,763 6,816 6,873 6,935 27,387 Cash 6,000 6,000 6,000 6,000 24,000 Amortization 763 816 873 935 3,387 Based upon the above information, What is the effective (market) rate of interest? SHOW CALCULATIONSKingbird Ltd. issued a $778,000, 10-year bond dated January 1, 2023. The bond was sold to yield 12% effective interest. The bond paid 10% interest on January 1 and July 1 each year. The company's year-end was December 31, and Kingbird followed IFRS. Using 1. factor Tables 2. a financial calculator, or 3. Excel function PV, calculate the amount received for the bond, and any discount or premium on the bond. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ORDINARY ANNUITY OF 1. (Round present value factor calculations to 5 decimal places, eg. 1.25124 and final answers to O decimal places eg. 58,971.) Proceeds from sale of bond on bond Date $ Prepare the journal entries for above transactions. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the…
- 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.Metlock Ltd. issued a $791,000, 10-year bond dated January 1, 2023. The bond was sold to yield 12% effective interest. The bond paid 10% interest on January 1 and July 1 each year. The company's year-end was December 31, and Metlock followed IFRS. Using 1. factor Tables 2. a financial calculator, or 3. Excel function PV, calculate the amount received for the bond, and any discount or premium on the bond. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ORDINARY ANNUITY OF 1. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places e.g. 58,971.) Proceeds from sale of bond Discount on bond Prepare the journal entries for above transactions. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the…Bond prices depend on the market rate of interest, stated rate of interest, and time. Read the requirements. Requirement 1. Compute the price of the following 5% bonds of Country Telecom. a. The price of the $500,000 bond issued at 75.75 is Requirements 1. 2. Compute the price of the following 5% bonds of Country Telecom. a. $500,000 issued at 75.75 b. $500,000 issued at 103.50 c. $500,000 issued at 95.75 d. $500,000 issued at 102.50 Which bond will Country Telecom have to pay the most to retire at maturity? Explain your answer. Print Done - X