User Account

All Pages

What is the dollar floatation cost on the new issue

Assignment Help Accounting Basics
Reference no: EM131805129

Question - Jan Volk, financial manager of Green Sea Transport (GST), has been asked by her boss to review GST's outstanding debt issues for possible bond refunding. Five years ago, GST issued $40,000,000 of 11%, 25 years debt. The issue, with semiannual coupons, is currently callable at a premium of 11%, or $110 for each $1,000 par value bond. Flotation cost on this issue were 6%, or $2,400,000.

Volk believes that GST could issue 20 years debt today with a coupon rate of 8%. The firm has placed many issues in the capital markets during the last 10 years, and its debt flotation cost are currently estimated to be 4% of the issue's value. GST's federal-plus -tax rate is 40%. What is the dollar floatation cost on the new issue?

Reference no: EM131805129

Questions Cloud

What is the total amount of cash discounts allowed : What is the total amount of cash discounts allowed in a year
Find the optimal solution for the objective function : Using linear programming, find the optimal solution for the objective function and the optimal values of each of the variables. To receive credit for this answe
What is the correcting entry : On October 1, 20X0, your company sublets warehouse space to for $900 a year to DEF, which pays in full upon signing. What is the correcting entry?
Discuss larkspur to record the sale of receivables : Prepare the journal entry on August 15, 2017, for larkspur to record the sale of receivables
What is the dollar floatation cost on the new issue : Volk believes that GST could issue 20 years debt today with a coupon rate of 8% What is the dollar floatation cost on the new issue
President of manufacturing for woodcase : Pete is the vice president of manufacturing for Woodcase Fine Cabinetry. He wants to use reinforcement theory to motivate his production
What other options does doug have : Doug Bloom has always loved technology and is very excited about the opportunities to gather, store, and share market knoledge and information.
Discuss a strategy of applying a drug safety approach : Discuss a strategy of applying a drug safety approach in your field of practice and its effect on advanced practice nursing.
Analysis and possibly for action : Data are a collectin of numbers, characters, or facts that are gathered according to some perceived need or analysis and possibly for action at a later point in

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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