Metro city needs 200000000 to build a light-rail system the

Assignment Help Accounting Basics
Reference no: EM13569386

Metro city needs $200,000,000 to build a light-rail system. The city's financial advisors believe that it will be able to borrow money by issuing a 30year bond with an annual coupon rate of 4.8% that pays interest every 6 months. However, interests rates have been very volatile over the last year ranging from 4.6% to 5.1% for borrowers with Metro's credit rating.

As a result, metro's town manager is concerned. If rates rise while the offering is in registration, metro will not get the $200 million it needs from the sale of its bonds. To make sure they will be able to raise enough money, Metro's financial advisors have recommended that Metro register a total of $250million worth of bonds. in the event that rates rise above 4.8% , metro will sell enough additional bonds to get the $200million they need for the rail system.

) if rates rise to 4.95% on the day the bonds are sold, how much would metro receive from the sale of $200million worth of bonds?

2) what is the par value of the additional bonds that metro must sell to raise the required $200million.

Reference no: EM13569386

Questions Cloud

Snow cleaners inc had net income of 494592 for its fiscal : snow cleaners inc had net income of 494592 for its fiscal year ended november 30 2012. during the year the company had
Justify your investigation by evaluating it in terms of its : justify your investigation by evaluating it in terms of its effectiveness and explain how it could be further improved.
Stangle company manufactures ties when 28000 ties are : stangle company manufactures ties. when 28000 ties are produced the costs per unit are direct materials 0.60 direct
Orkin company is considering two different mutually : orkin company is considering two different mutually exclusive capital expenditure proposals. project a will cost 489272
Metro city needs 200000000 to build a light-rail system the : metro city needs 200000000 to build a light-rail system. the citys financial advisors believe that it will be able to
A financial adviser claims that a particular stock earned : a financial adviser claims that a particular stock earned a total return of 10 last year. during the year the stock
Beacon company is considering two different mutually : beacon company is considering two different mutually exclusive capital expenditure proposals. project a will cost
What do the characters say with their dress gestures facial : what do the characters say with their dress gestures facial expressions and the like? do the same with a television
If you were to get a physical from your doctor and he or : if you were to get a physical from your doctor and he or she only took your blood pressure prior to stating that you

Reviews

Write a Review

Accounting Basics Questions & Answers

  Fair value of properties as final settlement

On  the basis of settlements other firms have received from this same country, Shoyo expects to receive 40% of the fair value of its properties as final settlement.

  Is granger stokes using budgets as a planning and control

Is Granger Stokes using budgets as a planning and control tool?

  On january 1 a company issues bonds dated january 1 with a

1.adidas issued 10-year 11 bonds with a par value of 170000. interest is paid semiannually. the market rate on the

  Increase the balance of an expense account

If the effect of the debit portion of an adjusting entry is to increase the balance of an expense account, which of the following describes the effect of the credit portion of the entry?

  Use a vertical method to prepare the 2012 income statement

the accounting records of clear photography inc reflected the folllowing balances as of january 1 2012.cash-

  Determining incremental cost of one unit

Direct materials $4, Direct labor $12, Variable support costs $32, and Fixed support costs $22. In the short term, the incremental cost of one unit is:

  Compute the percentage total return

Suppose a stock had an initial price of $83 per share, paid a dividend of $1.40 per share during the year, and had an ending share price of $96.

  Work in process inventory at the beginning of the period

Kent Company had 800 units of product in its work in process inventory at the beginning of the period. During the period 3,000 additional units of product were started.

  The fraudulent financial statements of lehman brothers

From the third and fourth e-Activities, take a position whether Ernst & Young should be held liable in relation to the fraudulent financial statements of Lehman Brothers. Provide a rationale with your response

  Most likely to use process costing

Which of the following would be most likely to use process costing? A. Superior Auto Body & Repair B. Crammond Custom Cabinets C. Sunshine Soft Drinks D. AJackson & Taylor Tax Service

  Data from the income statement of dray company for the

data from the income statement of dray company for the current fiscal year ended on december 31st and are presented

  What is the cost to purchase a statement?

nteract Case-FASAB. Examine the Federal Accounting Standards Advisory Board's Web site at www.fassab.gov and prepare a brief report about its mission and structure and compile a list of organizations represented on its Accounting and Auditing Policy ..

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