User Account

All Pages

What is the current market value of the firm debt for cms

Assignment Help Financial Accounting
Reference no: EM132998157

CMS Corporation's balance sheet as of today is as follows:

Long-term debt (bonds, at par)$10,000,000

Preferred stock2,000,000

Common stock ($10 par)10,000,000

Retained earnings4,000,00

Total debt and equity$26,000,000

Problem 1: The bonds have a 8.9% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the firm's debt?

Select the correct answer.

a. $8,221,698

b. $8,221,233

c. $8,223,091

d. $8,222,162

e. $8,222,627

Reference no: EM132998157

Questions Cloud

Find what is wacc for shi import-export : If Shi has a target capital structure of 30% debt, 5% preferred stock, and 65% common stock, what is its WACC? Round your answer to two decimal places.
Compute what is the monthly loan payment : What is the monthly loan payment? You want to buy a car, and a local bank will lend you $25,000. The loan would be fully amortized over 4 years
Distinguish between expenses and capital expenditures : Distinguish between expenses and capital expenditures during a non-current asset's useful life. On 1 October 2019, Picador Ltd purchased machinery was purchased
Find what is estimate of current stock price for orwell : Orwell building supplies' last dividend was $1.75. Its dividend growth rate is expected. What is the best estimate of the current stock price?
What is the current market value of the firm debt for cms : They mature exactly 10 years from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the firm's debt?
What are the primary differences between fcfe and fcff : What are the differences between GAAP-based and Pro Forma financial statements? What are the primary differences between FCFE and FCFF?
United nations human rights council : Research the organizational structure of the United Nations Human Rights Council. What are the goals of the organization? How is it structured to accomplish tho
Case study-multi-media ltd : Multi-Media Ltd. completed the following transactions:
Servant leadership models and other leadership models : Discuss the most significant differences between servant leadership models and other leadership models. Be sure to include specific examples that highlight the

Reviews

Write a Review

Financial Accounting Questions & Answers

  What salvoro and diputado capital accounts

What Salvoro and Diputado's capital accounts? Salvoro, Diputado, and Vincoy are in a partnership. Vincoy decides she wants to withdraw from the partnership

  Prepare a multistep income statement for rose corporation

Prepare a multistep Income statement for Rose Corporation for 2019. Accounts receivable 5,400. Sales revenue 55,500. Interest expense 900

  What is the net cost of the goods

What is the net cost of the goods if Glenn Company pays within the discount period? Glenn Company purchased merchandise inventory

  Any item or service that you sell is considered

Any item or service that you sell is considered to be:

  What is the annualized percentage of forward premium

The 125-day forward rate for the euro is $1.13, while the current spot rate for the euro is $1.14. What is the annualized percentage (%) of forward premium

  Calculate each party net borrowing cost-principal cash flow

A U.S. company has a liability of €10 million in fixed rate bonds outstanding at 6%. A Germany company has a $15 million FRN outstanding at LIBOR. The exchange rate is $1.5/€. Calculate each party’s net borrowing cost, the principal cash flows at the..

  How is balance sheet linked to other financial statement

$31,000 and its stockholders' equity decreased by $9,000 during the year, what was the amount of its total assets at the end of the year?

  Explains the possible effects of action on the balance sheet

Explains the possible effects of this action on the balance sheet at the end of Quarter 1. The company only manipulates cash flows; it does not manipulate.

  Calculate the companys overhead application rate

A company's manufacturing accounting system relates overhead to direct labor costs for the purpose of applying overhead to goods in process and finished goods inventories. The company's manufacturing costs for the current year were: direct labor, $57..

  Explain what the results suggest about the given company

Compute the following ratios for 2012 and explain what the results suggest about the company.

  How much money did the venture capitalists receive

Of the 9 million shares sold, 5 million shares were primary shares being sold by the company, How much money did the venture capitalists receive

  Find the total cash flows from investing activities is

Find the total cash flows from investing activities is determined as? Opening balance of machinery: $840 000. Closing balance of machinery: $960 000

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd