Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
The Robinson Corporation has $32 million of bonds outstanding that were issued at a coupon rate of 11.450 percent seven years ago. Interest rates have fallen to 10.450 percent. Mr. Brooks, the Vice-President of Finance, does not expect rates to fall any further. The bonds have 17 years left to maturity, and Mr. Brooks would like to refund the bonds with a new issue of equal amount also having 17 years to maturity. The Robinson Corporation has a tax rate of 30 percent. The underwriting cost on the old issue was 3.20 percent of the total bond value. The underwriting cost on the new issue will be 2.10 percent of the total bond value. The original bond indenture contained a five-year protection against a call, with a call premium of 9 percent starting in the sixth year and scheduled to decline by one-half percent each year thereafter. (Consider the bond to be seven years old for purposes of computing the premium.) Use Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Assume the discount rate is equal to the aftertax cost of new debt rounded up to the nearest whole percent (e.g. 4.06 percent should be rounded up to 5 percent)
a. Compute the discount rate. (Do not round intermediate calculations. Input your answer as a percent rounded up to the nearest whole percent.)
b. Calculate the present value of total outflows. (Do not round intermediate calculations and round your answer to 2 decimal places.)
c. Calculate the present value of total inflows. (Do not round intermediate calculations and round your answer to 2 decimal places.)
d. Calculate the net present value. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)
How will the trade conduct the transaction? What’s his/her profit (loss)?
You hold one ‘at-the-money’ put option on a stock with 10 days to maturity. Explain in detail whether your put option is now ‘in-the-money’ or out-of-the-money?
The risk free rate of interest is 2.5%. Inflation is expected to be 1.6% this year, 2% next year and 3% the following years. Assume the maturity risk premium is calculated to be .15x (t-1)% default risk premium is fixed at 1% and liquidity premium is..
In regard to Section 121, Sale of a Residence, the two-year ownership and use requirement and the "only once every two years" provision could create a hardship for taxpayers in certain situations that are beyond their control. The IRS allows three ex..
When the appropriate discount rate (required rate of return) is 10 percent, what is the present value of the pipeline's revenue?
Using financial data found on the internet, compute the gross profit margin, operating profit margin, net profit margin, return on assets of Hulu LLC.
Trace stock price, dividend yield, and capital gains yield for each year from today until 10 years from now.
Stock A has exhibited a standard deviation in stock returns of 0.5, whereas Stock B has exhibited a standard deviation of 0.6. The correlation coefficient between the stock returns is 0.5. What is the variance of a portfolio composed of 70 percent St..
An annual coupon bond has the same coupon rate, maturity, risk and par value. What would be the price of the annual coupon bond?
A fixed-income portfolio manager sets a minimum acceptable rate of return on the bond portfolio at 5.5% per year over the next 3 years.
Why would banks benefit from a steep yield curve?
The washington post is considering replacing an existing press with a more efficient press. If the firms WACC is 11% should they replace the press.
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd