1-A

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	5.6%	106	6 years	$ 23,000,000
2	6.7	113	9 years	40,000,000
3	6	106	18.5 years	43,000,000
4	6.9	119	29.5 years	56,000,000

rev: 05_16_2019_QC_CS-168873

Multiple Choice

• 5.23% Incorrect

• 3.38%

• 3.56%

• 3.74%

• 3.42%

1-B

Consider a project with a life of 9 years with the following information: initial fixed asset investment = $380,000; straight-line depreciation to zero over the 9-year life; zero salvage value; price = $34; variable costs = $17; fixed costs = $197,600; quantity sold = 81,016 units; tax rate = 23 percent. How sensitive is OCF to changes in quantity sold?

Multiple Choice

• $9.29 Incorrect

• $0.08

• $16.89

• $13.09

• $14.92

1-C

Dinklage Corp. has 10.1 million shares of common stock outstanding. The current share price is $52, and the book value per share is $6. The company also has two bond issues outstanding. The first bond issue has a face value of $88 million, has a 7 percent coupon, and sells for 90 percent of par. The second issue has a face value of $61.61 million, has a 7 percent coupon, and sells for 94.3 percent of par. The first issue matures in 9 years, the second in 6 years.

What is the company's capital structure weight of equity on a book value basis?

What is the company's capital structure weight of debt on a book value basis?

What is the company's capital structure weight of equity on a market value basis?

What is the company's capital structure weight of debt on a market value basis?