After tax cost of capital to walgreen for bonds

Assignment Help Financial Management

Reference no: EM13728753

The Walgreen Corporation is contemplating a new investment that it plans to finance using one-third debt. The firm can sell new $1000 par value bonds with a 15 year maturity at a price of $950 that carries a coupon interest rate of 12.9 percent that is paid semi-annually. If the company is in a 34 percent tac bracket, what is the after tax cost of capital to Walgreen for the bonds?

Reference no: EM13728753

Questions Cloud

Review each of the four components of the revenue cycle : Review each of the four components of the revenue cycle (Preclaims, Claims, Accounts Receivable, and Claims, reconciliation and collections) and identify a key staff member involved in each of the four components. Where is the health information prof..

Supply has earnings before interest and taxes : Dharma Supply has earnings before interest and taxes (EBIT) of $524000, interest expenses of $325000 abd faces a corporate tax rate of 36 percent. What is Dharma Supply's Net Income? what would dharma net income be if it didn’t have any debt?

Selecting an art exhibit may be a challenge : You may write your paper by choosing and viewing from the following artwork: painting, printmaking, drawing, photography, or full-round sculpture. Selecting an art exhibit may be a challenge or it may be easy, depending on what you have available. Ho..

Source of capital market value : As a consultant to GBH Skiwear, you have been asked to compute the appropriate discount rate to use in the evaluation of the purchase of a new warehouse facility. You have determined the market value of the firm’s current capital structure (which the..

After tax cost of capital to walgreen for bonds : The Walgreen Corporation is contemplating a new investment that it plans to finance using one-third debt. The firm can sell new $1000 par value bonds with a 15 year maturity at a price of $950 that carries a coupon interest rate of 12.9 percent that ..

Foreign exchange dealer-what is annualized rate of return : A foreign exchange dealer has $1 million for a short-term money market investment. That is, he wants minimal risk in his investment, but he still wants to maximize the available return. Given the following market rates in the U.S. and London, what wo..

What are the pros and cons of a drg payor system : What are the pros and cons of a DRG payor system, and a capitated payor system? If you were a health care czar, which one would you favor and why?

How you could make an arbitrage profit : You are working as a corporate treasurer and observe the following two exchange rates. Calculate, using $1 million how you could make an arbitrage (risk-free) profit.

Define and describe the field of epidemiology : Define and describe the field of Epidemiology (1/2 page)Define and explain epidemiologic transition and describe the factors involved in epidemiologic transition Say we suspect a relationship between a specific dietary factor and heart disease. Can y..

User Account

All Pages