Firm have to issue to receive the needed funds

Assignment Help Financial Management

Reference no: EM131014357

Sincery Station Corp needs to raise $ 527000 to improve its manufacturing plant. It has decided to issue 1000 par value bond with an annual coupon rate of 11.1 percent with interest paid semi-annually and a 15 yrs maturity. Investors require a rate of return of 8.9%.

A) Compute the market value of the bonds

B) How many bonds will the firm have to issue to receive the needed funds?

What is the firm after tax- cost f debt if the firm tax rate is 34%?

Reference no: EM131014357

Questions Cloud

Research correlation between infant and preschool measures : For this Discussion, use the Walden Library to research the correlation between infant and preschool measures of cognitive ability to adult measures of intelligence. Synthesize the research to support your position

What should an annual interest rate : Your uncle, Jerry, has just won a lottery prize. He has been given two options: (1) a lump sum payment of $350,000 now, or (2) $3,000 at the end of each month for the next 15 years. Assume your uncle is able to receive a 5.00 percent annual return co..

Coupon-paying bonds make annual coupon payments : Four years ago, Lisa Stills bought six-year, 9.76 percent coupon bonds issued by the Fairways Corp. for $947.68. If she sells these bonds at the current price of $914.97, what will be her realized yield on the bonds? Assume similar coupon-paying bond..

What is the acquisition premium for target shareholders : An acquirer’s standalone share price is $12 and its number of shares outstanding is 1,000,000. The target firm has 100,000 shares outstanding, and its standalone share price is $10. The synergy gain from merging the two firms is $500,000. If the acqu..

Firm have to issue to receive the needed funds : Sincery Station Corp needs to raise $ 527000 to improve its manufacturing plant. It has decided to issue 1000 par value bond with an annual coupon rate of 11.1 percent with interest paid semi-annually and a 15 yrs maturity. Investors require a rate o..

What critiques do you have about the article : What critiques do you have about the article? Were there any problems with the design of the studies? What do you think they could have done better? Did the researchers address them

What angle should be used to have the clown land directly : Can the performer be fired to the cushion without hitting the ceding? Will the clown land on the cushion? If not, will he land short or long of the mark? What angle should be used to have the clown land directly on the cushion?

Statement of financial position : There are many users of accounting information, such as business owners, stockholders, customers, lenders, and suppliers. Among the financial statements is the statement of financial position. Answer the following questions about the statement of fin..

Explain the hypothesis tested by this statistic : Interpret the regression coef?cient. Are subjects in the U.S. more willing to pay extra for non-biotech breakfast cereals than U.K. subjects, or are they less willing?

User Account

All Pages