Complete the problems using excel formula. Show all work (display all the variables used in your...
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Complete the problems using excel formula. Show all work (display all the variables used in your formulas, and/or detail all steps used in determining the calculation) 1. How much must you invest at 7% interest to see your investment grow to $15,000 in 9 years? 2. To save for her newborn son's college education, Lea Wilson will invest $7,000 at the beginning of each year for the next 17 years. The interest rate is 8 percent. What is the future value? 3. A 10-year bond, with a par value equaling $1,000, pays 7% annually. If similar bonds are currently yielding 6% annually, what is the market value of the bond? Use semi-annual analysis. 4. A firm recently issued bonds which currently have the following features: a 5% coupon rate, 10 years until maturity, and a current price of $1,170.50. Determine the Yield to Maturity; assume annual payments. 5. The coupon rate on an issue of debt is 11%. The yield to maturity on this issue is 11%. The corporate tax rate is 34%. What would be the approximate after-tax cost of debt for a new issue of bonds? (Round your answer to 2 decimal places.) 6. A firm is paying an annual dividend of $7.00 for its preferred stock which is selling for $69.00. There is a selling cost of $4.00. What is the after-tax cost of preferred stock if the firm's tax rate is 39%? (Round your answer to 2 decimal places.) 7. Raybac is about to go public. Its present stockholders own 550,000 shares. The new public issue will represent 930,000 shares. The shares will be priced at $40 to the public with a 16% spread. The out-of-pocket costs in addition to the spread will be $530,000. What are the net proceeds to Raybac? 8. Maxwell Corp. is coming to the market with a new offering of 450,000 shares of stock at $22 to the public. Maxwell will receive $19 per share. The firm has one million shares outstanding and earnings of $6 million before recording the new issue. What is the amount of earnings per share after the stock issuance? Cr Complete the problems using excel formula. Show all work (display all the variables used in your formulas, and/or detail all steps used in determining the calculation) 1. How much must you invest at 7% interest to see your investment grow to $15,000 in 9 years? 2. To save for her newborn son's college education, Lea Wilson will invest $7,000 at the beginning of each year for the next 17 years. The interest rate is 8 percent. What is the future value? 3. A 10-year bond, with a par value equaling $1,000, pays 7% annually. If similar bonds are currently yielding 6% annually, what is the market value of the bond? Use semi-annual analysis. 4. A firm recently issued bonds which currently have the following features: a 5% coupon rate, 10 years until maturity, and a current price of $1,170.50. Determine the Yield to Maturity; assume annual payments. 5. The coupon rate on an issue of debt is 11%. The yield to maturity on this issue is 11%. The corporate tax rate is 34%. What would be the approximate after-tax cost of debt for a new issue of bonds? (Round your answer to 2 decimal places.) 6. A firm is paying an annual dividend of $7.00 for its preferred stock which is selling for $69.00. There is a selling cost of $4.00. What is the after-tax cost of preferred stock if the firm's tax rate is 39%? (Round your answer to 2 decimal places.) 7. Raybac is about to go public. Its present stockholders own 550,000 shares. The new public issue will represent 930,000 shares. The shares will be priced at $40 to the public with a 16% spread. The out-of-pocket costs in addition to the spread will be $530,000. What are the net proceeds to Raybac? 8. Maxwell Corp. is coming to the market with a new offering of 450,000 shares of stock at $22 to the public. Maxwell will receive $19 per share. The firm has one million shares outstanding and earnings of $6 million before recording the new issue. What is the amount of earnings per share after the stock issuance? Cr
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The detailed answer for the above question is provided below Here are the solutions to the problems using Excel formulas All work is shown 1 How much ... View the full answer
Related Book For
Foundations of Finance The Logic and Practice of Financial Management
ISBN: 978-0132994873
8th edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty
Posted Date:
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