Question: please with explenation 1) J & B, Inc. has $5 million of debt outstanding with a coupon rate of 12%. Currently, the yield to maturity
please with explenation
1) J & B, Inc. has $5 million of debt outstanding with a coupon rate of 12%. Currently, the yield to maturity on these bonds is 14%. If the firm's tax rate is 40%, what is the after-tax cost of debt to J & B?
A) 12.0%
B) 14.0%
C) 8.4%
D) 5.6%
2) Sola Cola Corporation is undertaking a capital budgeting analysis. The rate on 10-year U.S. Treasury bonds is 3.60%, and the return on the S & P 500 index is 11.6%. If the cost of Sola Cola's common equity is 19.6%, calculate their beta.
A) 1.69
B) 5.4
C) 2.0
D) 1.38
3)MI has a $1,000 par value, 30-year bond outstanding that was issued 20 years ago at an annual coupon rate of 10%, paid semiannually. Market interest rates on similar bonds are 7%. Calculate the bond's price.
A) $956.42
B) $1,000.00
C) $1,168.31
D) $1,213.19
4) Little Feet Shoe Co. just paid a dividend of $1.65 on its common stock. This company's dividends are expected to grow at a constant rate of 3% indefinitely. If the required rate of return on this stock is 11%, compute the current value of per share of LFS stock.
A) $20.63
B) $21.24
C) $15.00
D) $55.00
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