Reference no: EM132875339

Read and clarify the questions

Question 1

Daegu Construction Company Ltd made a Sh.100 million bondage 5 years ago when interest rates were substantially high. The interest rates have now fallen and the firm wishes to retire this old debt and replace it with a new and cheaper one. Given here below are the details about the two bond issues: Old Bonds: The outstanding bonds have a nominal value of Sh.1,000 and 24% coupon interest rate. They were issued 5 years ago with a 15-year maturity. They were initially sold a their nominal value of Sh.1,000 and the firm incurred Sh.390,000 in floatation costs. They are callable at Sh.1,120. New Bonds: The new bonds would have a Sh.1,000 nominal value and a 20% coupon interest rate. They would have a 10-year maturity and could be sold at their par value.

The issuance cost of the new bonds would be Sh.525,000. Assume the firm does not expect to have any overlapping interest and is in the 35% tax bracket.

i) Calculate the after-tax cash inflows expected from the an-amortized portion of the old bond's issuance cost.

ii) b) Calculate the annual after-tax cash inflows from the issuance of the new bonds assuming the 10-year amortization.

iii) Calculate the after-tax cash outflow from the call premium required to retire the old bonds.

iv) Determine the incremental initial cash outlay required to issue the new bonds.

v) Calculate the annual cash-flow savings, if any, expected from the bond refunding.

Discuss the main features of:

i) corporate share repurchases (buy-backs); and

(ii) Share (stock) splits;

Question 2

Identify what you thought was the most important concept(s), method(s), term(s), and/or any other thing that you felt was worthy of your understanding.

Also, provide a graduate-level response to each of the following questions:

1. Explain the difference in procedural due process and substantive due process, providing examples of each.
2. Beets R Us, LLC is a medium-sized farm in Iowa that grows beets that are only sold in Iowa. It does not export its beets outside of Iowa, though sometimes customers from out of state buy its beets while visiting Iowa. Is Beets R Us, LLC's business practices subject to federal jurisdiction under Article I, Section 8 of the United States Constitution? Why or why not?

Question I -  Kansas passes a statutes which says all corn must be grown and processed in a certain manner so as to avoid harmful pesticides. This statute is challenged as being unconstitutional. What are the two factors for the court to consider when deciding whether the statute is constitutional?

Question II -  Downtown Cincinnati, in an area known as "Over the Rhine", has long been an area of poverty containing empty and rundown buildings. The city of Cincinnati wishes to use this area to create new businesses and spark economic development. Would the eminent domain power allow the city to take this property from the building owners for the purpose of economic rejuvenation and elimination of "blight" within the city? What U.S. Supreme Court case would serve as precedent for this issue?