What is sears before-tax component cost of debt

Assignment Help Financial Management

Reference no: EM131611227

1. Assume that you are interested in a 4.25 percent coupon corporate bond that has eighteen years left to maturity, but can be called back in four years for a premium of one year’s worth of interest payments. If coupon payments are semiannual, and the bond is currently selling for $1,075, what is the yield you could expect on this bond if you held it until it can be called? ?

2. Deere & Co. list the following information in their financial statements: sales of $200 million, current assets of $25 million and fixed assets of $50 million. Calculate the fixed asset turnover and total asset turnover for Deere & Co. What does this suggest about their asset efficiency?

3. Suppose you are considering an investment in Amazon.com. Amazon's balance sheet lists the following: current assets of $450,000, fixed assets of $950,000, current liabilities of $275,000, long-term liabilities of $550,000, and total shareholders' equity of $575,000. Calculate the debt ratio, equity multiplier, and debt-to-equity ratio for Amazon.com. What do these ratios suggest about the leverage of Amazon?

4. Sears has a $100 million 30-year bond issue currently selling for 103 percent of par that carries a coupon rate of 5 percent, which is paid annually. What is Sears’s before-tax component cost of debt?

Reference no: EM131611227

Questions Cloud

What is the profit or loss associated with copper : Allocate the joint costs using relative weight. With these costs, what is the profit or loss associated with Copper??

Calculate the cash flows for project : Assume that machine will be fully depreciated and cannot be resold. Calculate the cash flows for this project.

Pros-cons of centralized trading system with clearing house : What are the pros and cons of a centralized trading system with a clearinghouse?

What is the investor total net gain or loss on the trade : What is the investor’s total net gain or loss on the trade?

What is sears before-tax component cost of debt : What is Sears’s before-tax component cost of debt?

What is the price of put option derived from put-call parity : A share of stock has both put and call options outstanding based on it. What is the price of the put option derived from put-call parity?

Analysts forecast target growth rate : Analysts forecast Target’s growth rate to be 8.00 percent in the future.

Current account surplus or capital account surplus : What are the three methods of financing small business operations. What in your opinion is better for country-current account surplus or capital account surplus

Determine the effect of its inventory turnover ratio : Winston Inc. is trying to determine the effect of its inventory turnover ratio and days sales outstanding on its cash conversion cycle.

User Account

All Pages