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Last year Carson Industries issued a 10-year, 15% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,075 and it sells for $1,270. a. What is the bond's nominal yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places. % What is the bond's nominal yield to call? Do not round intermediate calculations. Round your answer to two decimal places. % Would an investor be more likely to earn the YTM or the YTC? -Select-Since the YTM is above the YTC, the bond is not likely to be called.Since the YTC is above the YTM, the bond is not likely to be called.Since the coupon rate on the bond has declined, the bond is not likely to be called.Since the YTM is above the YTC, the bond is likely to be called.Since the YTC is above the YTM, the bond is likely to be called. b.What is the current yield? (Hint: Refer to Footnote 7 for the definition of the current yield and to Table 7.1.) Round your answer to two decimal places. % Is this yield affected by whether the bond is likely to be called? I.If the bond is called, the current yield and the capital gains yield will remain the same. II.If the bond is called, the capital gains yield will remain the same but the current yield will be different. III.If the bond is called, the current yield and the capital gains yield will both be different. IV.If the bond is called, the current yield and the capital gains yield will remain the same but the coupon rate will be different. V.If the bond is called, the current yield will remain the same but the capital gains yield will be different. -Select-IIIIIIIVV c.What is the expected capital gains (or loss) yield for the coming year? Use amounts calculated in above requirements for calcuation, if reqired. Round your answer to two decimal places. Enter a loss percentage, if any, with a minus sign. % Is this yield dependent on whether the bond is expected to be called? I.If the bond is expected to be called, the appropriate expected total return will not change. II.The expected capital gains (or loss) yield for the coming year depends on whether or not the bond is expected to be called. III.The expected capital gains (or loss) yield for the coming year does not depend on whether or not the bond is expected to be called. IV.If the bond is expected to be called, the appropriate expected total return is the YTM. V.If the bond is not expected to be called, the appropriate expected total return is the YTC.
Rocky Sales, Inc., has current sales of $1,170,994 and net income of $187,359. It also has a debt ratio of 43 percent and a dividend payout ratio of 56 percent. The company’s total assets are $785,099. What is its sustainable growth rate?
You must evaluate a proposed spectrometer for the R&D department. The base price is $260,000, and it would cost another $39,000 to modify the equipment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold aft..
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Which of the following statements about the cost of equity to not-for-profit businesses is most correct?
Holding all other things constant, additional debt financing needed would be reduced with an increase in the firm's
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What does the EMH say about whether it is a smart move? What anomaly we studied in the course would suggest otherwise?
A company currently plans a capital structure comprised of preferred stock with a weight of 30% and common stock with a weight of 40%.
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