A companys 6% coupon rate, semiannual payment, $1,000 par value bond that matures in 30 years sells
Question:
A company’s 6% coupon rate, semiannual payment, $1,000 par value bond that matures in 30 years sells at a price of $515.16. The company’s federal-plus-state tax rate is 25%. What is the firm’s after-tax component cost of debt for purposes of calculating the WACC?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 77% (9 reviews)
Enter these values N 60 PV 51516 ...View the full answer
Answered By
Joram mutua
I am that writer who gives his best for my student/client. Anything i do, i give my best. I have tutored for the last five years and non of my student has ever failed, they all come back thanking me for the best grades. I have a degree in economics, but i have written academic papers for various disciplines due to top-notch research Skills.In additional, I am a professional copywriter and proofreader.
5.00+
2+ Reviews
10+ Question Solved
Related Book For
Intermediate Financial Management
ISBN: 9780357516669
14th Edition
Authors: Eugene F Brigham, Phillip R Daves
Question Posted:
Students also viewed these Business questions
-
A zero-coupon ($1,000 par value) bond that matures in 10 years has a promised yield of 9%. What is the bonds price?
-
A Treasury bond that matures in 10 years has a yield of 6%. A 10-year corporate bond has a yield of 9%. Assume that the liquidity premium on the corporate bond is 0.5%. What is the default risk...
-
A government bond that matures in 10 years has a yield of 6%. A 10-year corporate bond has a yield of 9%. Assume that the liquidity premium on the corporate bond is 0.5%. What is the default risk...
-
Sketch the six graphs of the x- and y-components of position, velocity, and acceleration versus time for projectile motion with x 0 = y 0 = 0 and 0 < 0 < 90.
-
Being unbiased and having a small variability are two desirable characteristics of a statistic if it is going to be used as an estimator. Describe how the SDSM addresses both of these properties when...
-
Show that the swap volatility expression (33.19) in Section 33.2 is correct. 01-09-1Lk-nm-1 (1)Gkm (0) (0)72 dt (33.19) 1 + Tk.mGkm(0)
-
Data 2.7 on page 95 introduces the dataset HollywoodMovies, which contains information on more than 900 movies that came out of Hollywood between 2007 and 2013. One of the variables is the budget (in...
-
The Gamma Ray Company produces two products, the Gamma Blaster (GB) and the Gamma Disaster (GD). Each product is made from three components: A, B, and C. The Gamma Blaster is made from the following...
-
3. If the input is a sorted array with n elements in ascending order, what is the big O notation of Merge Sort? Why? (20 points) MERGE-SORT(A. p.r) 1 if p
-
XYZ is a calendar-year corporation that began business on January 1, 2020. For the year, it reported the following information in its current-year audited income statement. Notes with important tax...
-
Start with the partial model in Ch08 P26 Build a Model.xlsx on the textbooks Web site. Traver-Dunlap Corporation has a 15% weighted average cost of capital (WACC). Its most recent sales were $980...
-
The following table gives the current balance sheet for Travelers Inn Inc. (TII), a company that was formed by merging a number of regional motel chains. The following facts also apply to TII. (1)...
-
Why is the allocation of expenses and issue for NFPs?
-
Which of the following is not a true statement? A. The first line of every constructor is a call to the parent constructor via the super() command. B. A class is not required to have a constructor...
-
Fill in the blanks: ___________________ is used to call a constructor in the parent class, while ___________________ is used to reference a member of the parent class. A. super and this() B. super...
-
What is the output of the following application? A. 8 B. Line p1 contains a compiler error. C. Line p2 contains a compiler error. D. Another line of code contains a compiler error. E. None of the...
-
What can fill in the blank so the play() method can be called from all classes in the com. mammal and com.mammal.eland package, but not the com.mammal.gopher package? package com.mammal; public class...
-
How many lines will not compile? A. Zero B. One C. Two D. Three E. Four F. Five 12: public void print Varargs (String... names) { System.out.println (Arrays.toString (names)); 13: 14: } 15: public...
-
What are the three supports on which market efficiency rests? Why is it that only one of them is required?
-
Cable Corporation is 60% owned by Anna and 40% owned by Jim, who are unrelated. It has noncash assets, which it sells to an unrelated purchaser for $100,000 in cash and $900,000 in installment...
-
In general terms, what is the Capital Asset Pricing Model (CAPM)? What assumptions were made when it was derived?
-
Define the terms covariance and correlation coefficient. How are they related to one another, and how do they affect the required rate of return on a stock? Would correlation affect its required rate...
-
What is an efficient portfolio? What is the Capital Market Line (CML), how is it related to efficient portfolios, and how does it interface with an investors indifference curve to determine the...
-
According to Carter (2009), supply chain integration focuses on two key issues--alignment and linkage--both inside an organization and across organizations. Please define and give an example of each...
-
Google 'africa transformational projects - dangote', and read the ft.com article on Aliko Dangote; then, read the mckinsey.com article on the Dangote Group; finally read the...
-
A couple, Meghan and Harry, are going to buy a house priced at $588,000. They are getting a 30-year mortgage that has an interest rate of 4.22%. To get this loan, they will need 15% down payment. The...
Study smarter with the SolutionInn App