Cost of debt for use in the wacc calcularion

Assignment Help Finance Basics
Reference no: EM132200052

Unity communications company's noncallable bonds were issued several years ago and now have 15 years to maturity. These bonds have a 12% annual coupon, paid semiannually, sells at a price of $1,070, and has a par value of $1,000. If the firm's tax rate is 40%, what is the component cost of debt for use in the WACC calcularion?

5.35%, 5.58%, 5.83%, 6.62%, or 7.33%

Reference no: EM132200052

Questions Cloud

What is hastings required return : If the market return is expected to be 12.40 percent and the risk-free rate is 5.40 percent, what is Hastings' required return?
What is snow white wacc : The firm will not be issuing any new common stock. What is snow White's WACC?
Write a function in matlab that takes as input the number : Write a function in Matlab that takes as input the number of iterations k, the size n, and a sparse matrix A.
What are the nigerians like : What are the "Nigerians" like? Do they have any stereotypical racist features? What role do they play in the film? How do they fit (or not) into the politics of
Cost of debt for use in the wacc calcularion : If the firm's tax rate is 40%, what is the component cost of debt for use in the WACC calcularion?
Write a function that returns the index of character c : Write a function that returns a new string consisting of the sequence of characters between the ith and jth index in str char substring.
History of segregation and illegality of miscegenation : In what ways does the novel comment on the history of segregation and the illegality of miscegenation?
In knowledge management what is the analytics : In Knowledge Management What is the Analytics? What is your perspective of "the power of Analytics" ?
Think back over your personal work experiences : Think back over your personal work experiences and share a situation where you worked with a manager or leader who really motivated you.

Reviews

Write a Review

Finance Basics Questions & Answers

  Compute what is the current bond price

Ninja Co. issued 15-year bonds a year ago, at a coupon rate of 8.1 percent. The bonds make semiannual payments. If the YTM on these bonds is 6.4 percent.

  Discuss on two projects that require an investment

Discuss on two projects that require an investment in the firm.

  Describe capital budgeting decision based on present value

Describe Capital budgeting decision based on net present value of XYZ Company is considering replacing a printing machine

  Describe the kinds of securities the u.s. government uses

On January 15, 2020, the U.S. Treasury issued a 10-year inflation-indexed note with a coupon of 6%. On the date of issue, the CPI was 400. By January 15, 2030, the CPI had decreased to 300. What principal and coupon payment was made on January 15, 20..

  Estimate the company net income

If a company can expect an extra $2 million in sales if it enters a new market and it knows that 15 percent of its sales will be uncollectible, collection costs will be 2 percent on all new sales,

  Yankee inc a us based mnc has recently decided to expand

international finance and bankingcase studyyankee inc. a u.s. based mnc has recently decided to expand its

  Random samples of transactions within a database

Internal auditors sometimes check random samples of transactions within a database. Suppose that in a particular set of transactions, 2% contain

  Barbow enterprises inc is considering an expansion in their

barbow enterprises inc. is considering an expansion in their operations. one of the first items they want to examine is

  Determine the price of a strike

Assume the Black-Scholes framework for a futures exchange on F. The volatility of the exchange is 0.4, and the current futures price is 73.

  What is the new required price

It also negotiates a 7% increase with managed-care plan #1. Assuming all other factors are unchanged, what is the new required price?

  Long-term financial management decisions

About 67% of the acquisitions of other companies result in losses to the acquiring firms stockholders. Since it is well documented that most acquisitions are financial failures, why do firms continue to purchase other firms?

  Determining the value of bond

What impact does number of years till maturity have on the value of bond? Mention three capital budgeting methods (decision rules) and rank them from least to most useful. Defend your ranking.

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