User Account

All Pages

Nww marginal tax rate

Assignment Help Finance Basics
Reference no: EM131318402

Five years ago, NorthWest Water (NWW) issued $50,000,000 face value of 30-year bonds carrying a 14% (annual payment) coupon. NWW is now considering refunding these bonds. It has been amortizing $3 million of flotation costs on these bonds over their 30-year life. The company could sell a new issue of 25-year bonds at an annual interest rate of 11.67% in today's market. A call premium of 14% would be required to retire the old bonds, and flotation costs on the new issue would amount to $3 million. NWW's marginal tax rate is 40%. The new bonds would be issued when the old bonds are called.

What is the NPV if NWW refunds its bonds today?

Reference no: EM131318402

Questions Cloud

Describe factors you believe should be considered in risk : Describe other factors you believe should be considered in risk management. The assignment should be comprehensive and include specific examples. The paper should be formatted according to APA.
How long are the project and feeder buffers : What is the duration of the project? How much slack is currently available in the non-critical path? How long are the project and feeder buffers?
Design the logical structure of a database : Design the logical structure of a database using Entity-Relationship diagram - Apply normalization techniques to reduce redundancy in a database.
Which firm is firm a also comment on your reasons : Which firm is Firm A? Comment on your reasons.- Which firm is Firm B? Comment on your reasons.- Which firm is Firm C? Comment on your reasons.
Nww marginal tax rate : A call premium of 14% would be required to retire the old bonds, and flotation costs on the new issue would amount to $3 million. NWW's marginal tax rate is 40%. The new bonds would be issued when the old bonds are called.
Plot the original series, and each of the forecasts : Create a 4-period moving average forecast, an exponential smoothing forecast with alpha=0.2, and a linear trend forecast for your data.
Level of the firms current liabilities : Company A has inventory equal to $100,000 with a current ratio of 2.3 and quick ratio of 1.8, what is the level of the firms current liabilities?
Differing responsibilities of federal and state law agencies : Prepare a 3 page paper which details the differing responsibilities of both federal and state law enforcement agencies seeking to ensure border safety
Why is a business review so important : What is a hyptohesis?Why is a business review so important?

Reviews

Write a Review

Finance Basics Questions & Answers

  Using the same organization you reviewed in week two assume

using the same organization you reviewed in week two assume your organization wants to expand operations and is faced

  Estimate of the current stock price

There are 7.1 million shares of stock outstanding and investors require a return of 13 percent on the company's stock. The corporate tax rate is 39 percent. a. What is your estimate of the current stock price?

  What is the price of the bond using a semiannual convention

Wesley Company will issue a zero-coupon bond this coming month. The projected yield for the bond is 5%. If the par value of the bond is $1,000, what is the price of the bond using a semiannual convention if a. The maturity is 20 years? b. The maturit..

  Identify the different business structures

Watch the "Your Business Structure" and "Corporate Business Structures" videos on the Electronics Reserve Readings page. Identify the different business structures.

  What is the terminal value for assessing the cash flows afte

A project's annual operating cash flows for the next five years are $120,000, $150,000, $180,000, $200,000, and $220,000. Assuming a discount rate of 12% and a terminal growth rate of 3%, answer the following questions.(A)What is the terminal value f..

  Determine the probability of recording

Determine the probability of recording 4 eye injuries, 3 hand injuries, 2 hand injuries, and 1 injury of the "other" variety. Of 5 total recorded injuries, what is the probability that fewer than 2 are eye injuries?

  Calculating total amount of interest

Suppose you purchased a new Lan Rover for $67,000 on October 31, 1999. The down payment was $15,000. A bank financed the remaining balance at 12% interest rate for sixty months with monthly payments.

  Determine what will happend to the exchange rate

if japan has low inflation and mexico has high inflation, what will happend to the exchange rate between the Japanese Yen and Mexican Peso.

  Identify the most efficient capital structures for both a

personal selling and sales objectivesnbsp please respond to the followingcompare and contrast a personal selling

  Discuss when an account receivable should be established

Define and discuss when an Account Receivable should be established

  Value a stock option

Explain how expected rate of return used to value stock.

  What is the current stock price

A stock just paid a dividend of $1.2. The required rate of return is 11.5%, and the constant growth rate is 3.6%. What is the current stock price.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd