At what price would these bonds sell in the marketplace

Assignment Help Finance Basics
Reference no: EM132097252

Kintel, Inc., management wants to raise $1 million by issuing six-year zero coupon bonds with a face value of $1,000. The company's investment banker states that investors would use an 11.82 percent discount rate to value such bonds. Assume semiannual coupon payments.

At what price would these bonds sell in the marketplace?

How many bonds would the firm have to issue to raise $1 million?

Reference no: EM132097252

Questions Cloud

Compute the after tax cost of debt : The firms current yield to maturity on debt is 6% and the debt pays a 4% coupon. current tax rate equal 41.4%. Compute the after tax cost of debt.
Find the size of the payments : He expects to receive 100 equal monthly payments from the investment; the first payment is expected in one year. Find the size of the payments.
Scenario and calculate the maximum offer : What adjustments should be applied in each scenario and calculate the maximum offer.
Long-term debt outstanding at the start of the year : What is the formula to calculate the required external financing over the next year?
At what price would these bonds sell in the marketplace : At what price would these bonds sell in the marketplace? How many bonds would the firm have to issue to raise $1 million?
What are the weight of equity-weight of debt : What are the weight of equity, weight of debt, cost of equity, after tax cost of debt, WACC.
Income statement relate to the health of the company : How does the balance sheet, income statement relate to the health of the company? What does a trend analysis of statements of cash flows tell?
Portfolio risk and raise return to risk ratio : Why the addition of a risk-free asset will lower the overall portfolio risk and raise return to risk ratio?
Happen to the required return on the company stock : (a) what would happen to the firm's WACC? What would happen to the required return on the company's stock?

Reviews

Write a Review

Finance Basics Questions & Answers

  Venture capitalists will frequently

Venture capitalists will frequently

  Differences between appropriations and encumbrances

Prepare a Microsoft PowerPoint presentation for the differences between appropriations and encumbrances. You can use the University online library resources to search for information. Use a minimum of two to three examples of each term in your sli..

  At what interest rate will a payment of

$773 invested for 14 years at 11 percent compounded annually?

  Different groups that use financial ratio analysis

There are several different groups that use financial ratio analysis. Who are these groups and what are the primary concerns of each?

  Which intern’s report has the error

The CFO agrees with the final accept/reject decision that each intern made. But she spotted an error in the numbers reported by one of the interns.

  How much can you carry over to next year

You have four stocks that have each decreased $2500 in value. If you sell two of them and take the full allowable deduction this year, how much can you carry over to next year?

  In late 1993 mgrm reported losses of about 13 billion in

in late 1993 mgrm reported losses of about 1.3 billion in connection with the implementation of a hedging strategy in

  Problem about revenue recognition

Our sources of revenues include: (1) software, which includes new software license revenues earned from granting licenses to use our software products and fees from cloud software subscription offerings, and software license updates and product su..

  What is the forward price on a contract

What is the forward price on a 1-year contract on a portfolio tracking the NASDAQ composite index, assuming the current value of the index is 5850.61.

  Compute profit and return on the investment

Assume you buy a round lot of Horse Inc stock on 55% margin when it is selling at 38.70 a share. The broker charges an 8% yearly interest rate and commission are 4.5% of the total stock value

  How much higher is the effective annual rate

She agrees to lend you the $1,000, but she wants you to pay her $10 of interest at the end of each of the first 11 months plus $1,010 at the end of the 12th month. How much higher is the effective annual rate under your friend's proposal than unde..

  A study is conducted to compare the length of time between

a study is conducted to compare the length of time between men and women to assemble a certain product. past experience

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd