What is the agreed-upon forward rate in the transaction

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Reference no: EM132001000

1. Our company has 5000 five year bonds outstanding, with a face value of $1,000 and a coupon rte of 6%. Coupon payments are semi annual and the current price is $876.58 per bond. What is our cost of debt annually if marginal tax is 21%?

a company has 40 000 shares of common stock outstanding, annual dividend is .68 and market price is 7.33. what is the cost of preferred stock

2. On May 15, 2000 you enter into a 1-year forward rate agreement (FRA) with a bank for the period starting November 15, 2000 to May 15, 2001. You will receive the forward rate and pay the floating rate in the FRA. You know that currently the price of the 6-month zero coupon is $96.79 and the price of the 1-year zero coupon is $93.51.

(a) What is the agreed-upon forward rate in the transaction?

(b) What is the value of the forward at inception?

Reference no: EM132001000

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