What is asbury after tax cost of debt

Assignment Help Finance Basics
Reference no: EM13263629

Asbury Corp. Issued 30 year bonds 11 years ago with a coupon rate of 9.5%. Those bonds are now selling to yield 7%. The firm also issued some 20 year bonds 2 years ago with an 8% coupon rate. The two bond issues are rated equally by Standard and Poor's and Moody's. Asbury's marginal tax rate is 38%.

a) What is Asbury's after tax cost of debt?

b) What is the current selling price of the 20 year bonds?

 

Reference no: EM13263629

Questions Cloud

What is the firms weighted average cost of capital : If Imaginary is subject to a 40 percent marginal tax rate, then what is the firm's weighted average cost of capital?
Find angle between axes of each pair of adjacent polarizers : A beam of unpolarized light shines on a stack of five ideal polarizers, Find the angle between the axes of each pair of adjacent polarizers
What is the periodic interest rate applicable per quarter : A bank pays interest quarterly with an EAR of 8%. What is the periodic interest rate applicable per quarter?
What is the symbolic signi?cance of the naked blonde : Discuss how the protagonist's expectations are similar to what has come to be known as the American dream - the assumption that ambition, hard work, perseverance, intelligence, and virtue always lead to success.
What is asbury after tax cost of debt : Asbury Corp. Issued 30 year bonds 11 years ago with a coupon rate of 9.5%. Those bonds are now selling to yield 7%. The firm also issued some 20 year bonds 2 years ago with an 8% coupon rate.
What are the accounting and npv break-even levels of sales : Modern Artifacts can produce keepsakes that will be sold for $60 each. Nondepreciation fixed costs are $2,600 per year and variable costs are $30 per unit.
How far away from the dart board is the dart released : A dart is thrown horizontally with an initial speed of 16 m/s toward point P, the bull's-eye on a dart board. It hits at point Q on the rim, How far away from the dart board is the dart released
Which option has the highest risk and lowest risk : Stock ABC does not have any traded options and is trading at $25 now. You believe the stock will decrease by 20% over the next six months.
Find the photoelectric cutoff wavelength for this material : The work fuction of a particular substance is 7.81*10^-19 J. What is the photoelectric cutoff wavelength for this material

Reviews

Write a Review

Finance Basics Questions & Answers

  Exchange rate effects on borrowing

Describe how the appreciation of Japanese yen against the U.S. dollar would affect the return to U.S. firm that borrowed Japanese yen and employed the proceeds for the U.S. project.

  Explain behavioral phenomena

On May 20, 2004, The Wall Street Journal ran a front page story entitled "Biotech's Dismal Bottom Line: More Than $40 Billion in Losses. " The article makes many points.

  What is your average accounts receivable balance

On average your firm sells $26500 of items on credit each day. Your average operating cycle is 51 days and your firm acquires and sells inventory on average every 19 days. What is your average accounts receivable balance?

  Determining the interest rate swap

Now assume the swap contract start from now on and the current zero rates are in the table below. Compute how much the swap value right now for fixed payment side.

  Calculate the price of each of the bonds

An investor has two bonds in his or her portfolio, Bond C and Z. Each matures in four years, has a face value of $1,000, and has a yield to maturity of 9.6%.

  Determine the approximate expected return

Suppose a project that has the following returns for years 1 to 5: 15%, 4%, -13%, 34%, and 17%. Determine the approximate expected return of this investment?

  Compute the break-even point in units

Shock Electronics sells portable heaters for $25 each unit, and the variable cost to produce them is $17. Mr. Amps estimates that the fixed expenses are $96,000.

  Computation of unemployment rate

Computation of unemployment rate and Assume the share of whites in the labour force is 82% and the unemployment rate

  How large should the capital budget be

evaluates projects that have above- or below-average risk. Data on the 7 projects are shown below. If these are the only projects under consideration, how large should the capital budget be?

  Equilibrium expected growth rate

McDonnell Manufacturing is expected to pay a dividend of $1.50 per share at the end of the year. The stock sells for $34.50 per share, and its required rate of return is 11.5 percent.

  Financial management and time value of money

How are compounding and discounting related? Explain time value of money.

  Determination of companies dso

Firm x has sales of 10 million per year, all on credit terms calling for payment within 30 days; and its accounts receivable is two million. Determine the company's DSO,

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