Business, 21.08.2019 22:10 yoongnzl

P9-2: cost of debt using both methods currently, warren industries can sell 15-year, $1,000-par-value bonds paying annual interest at a 7% coupon rate. because cur-rent market rates for similar bonds are just under 7%, warren can sell its bonds for $1,010 each; warren will incur flotation costs of $30 per bond in this process. the firm is in the 40% tax bracket. a. find the net proceeds from sale of the bond, nd. b. show the cash flows from the firm’s point of view over the maturity of the bond. c. calculate the before-tax and after-tax costs of debt. d. use the approximation formula to estimate the before-tax and after-tax costs of debt. e. compare and contrast the costs of debt calculated in parts c and d. which approach do you prefer? why?

Answers: 2

Show answers

Another question on Business

Business, 22.06.2019 18:30

Hilary works at klothes kloset. she quickly the customers, and her cash drawer is always correct at the end of her shift. however, she never tries to "upsell" the customers (for example, by asking if they would like to purchase earrings to go with the shirt they chose or by suggesting a purse that matches the shoes they are buying). give hilary some constructive feedback on her performance.

Answers: 3

Answer

Business, 22.06.2019 20:10

Mikkelson corporation's stock had a required return of 12.50% last year, when the risk-free rate was 3% and the market risk premium was 4.75%. then an increase in investor risk aversion caused the market risk premium to rise by 2%. the risk-free rate and the firm's beta remain unchanged. what is the company's new required rate of return? (hint: first calculate the beta, then find the required return.) do not round your intermediate calculations.

Answers: 2

Answer

Business, 23.06.2019 07:00

Which (if any) of the following scenarios is the result of a natural monopoly? instructions: you may select more than one answer. a. patent holders of genetically modified seeds are permitted to sue farmers who save seeds from one planting season to the next. b. doctors in the united states are prohibited from practicing without a medical license. c. there is one train operator with service from baltimore to philadelphia. d. coal is used as the primary energy in a country with abundant coal deposits.

Answers: 1

Answer

Business, 23.06.2019 14:20

Jessica wants to plan where she will place furniture in her room, so she has drawn a scale model of her room in order to begin planning. the scale model is 11 inches long and 8.5 inches wide. jessica notices that the door to her room takes up 1.75 inches on the right-side wall of her room, and she realizes that she cannot place any furniture in the area that the door turns through when it is opened.

Answers: 3

Answer

You know the right answer?

P9-2: cost of debt using both methods currently, warren industries can sell 15-year, $1,000-par-val...

Questions