Assume that Bestbuy wants to borrow $ 8 billion and to repay it in ten years. It
Question:
Assume that Bestbuy wants to borrow $ billion and to repay it in ten years. It intends to borrow, on Jan by issuing one of the following bonds:
i Ten year maturity, annual coupon, paid semiannually on June th and Dec st
ii Ten year maturity zero coupon bonds
iii Ten year maturity, annual coupon, paid semiannually as above
A For each of the three choices, how many bonds will it have to issue to raise the $ billion it needs? Assume that each bond has a face value of $ and that the cost of debt for Best buy is per year, APR.
B For each year from to list the total dollar amount, in millions, it will have to pay to the bondholders. Just the total $$$ not the discontinued present value.
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill