What is interest rate on the debt

Assignment Help Financial Management

Reference no: EM132037251

Rackin Pinion Corporation’s assets are currently worth $1,080. In one year, they will be worth either $1,040 or $1,330. The risk-free interest rate is 3 percent. Suppose the company has an outstanding debt issue with a face value of $1,000.

What is the value of the equity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

What is the value of the debt? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

What is the interest rate on the debt? (Do not round intermediate calculations. Enter your answer as a percent rounded to the nearest whole number, e.g., 32.)

Reference no: EM132037251

Questions Cloud

What equal annual payments must be made to discharge loan : What equal annual payments must be made to discharge the loan, plus pay the bank its required rate of interest?

What is the beta of the portfolio : The total value of stocks in the portfolio is $150,000, of which the value of A is $60,000, of B is $75,000 and C is $15,000.

Tax increases or decreases affecting that growth : How rapidly have state and local taxes grown in Texas state from 2014-2018? Is that faster or slower than growth in state personal income and the rate

Record the initial purchase of the noah inc shares : On June, 2018, Minute Corp. invested $270.000 in Noah inc. for 50% of its outstanding common shares. Record the initial purchase of the Noah Inc shares

What is interest rate on the debt : What is the value of the equity? What is the value of the debt? What is the interest rate on the debt?

Expected market rate of return : If the expected market rate of return is 7%, and the riskless rate is 1.5%, what is the expected return of the above portfolio according to CAPM?

Identify technical analysis : Being specific, identify Technical Analysis and explain its relation to or its effect on portfolio management and why it is analytically useful?

Calculate the amount of accumulated depreciation : Assuming the Company uses the straight-line method, the amount of accumulated depreciation on the Year 6 balance sheet would be

What will the firm PE ratio be : A firm has 50,000 shares of stock outstanding, net income of $50,000, and a PE ratio of 15. What will the firm’s PE ratio be if firm repurchases 25,000 shares.

User Account

All Pages