What is the firms after-tax component cost

Assignment Help Finance Basics
Reference no: EM13262598

A company's 8% coupon rate, semiannual payment, $1,000 par value bond that matures in 20 years sells at a price of $577.36. The company's federal-plus-state tax rate is 35%. What is the firm's after-tax component cost of debt for purposes of calculating the WACC?

Reference no: EM13262598

Questions Cloud

Determine the liquidity premium for the corporate bond : A ten-year U.S. Treasury bond has a 3.5 percent interest rate, while an identical maturity corporate bond has a 5.25 percent interest rate.
Describe what mass of copper in mg : If the charge calculated in the first part of this question is passed through a cell constructed of copper electrodes immersed in an acidic solution of copper sulfate (0.5 M CuSO4/0.1 M H2SO4), what mass of copper, in mg, will be deposited on the ..
What bid price per stamp should you submit : Your tax rate is 31 percent and your required return on this project is 11 percent. What bid price per stamp should you submit?
What is the dividend yield : The next dividend payment by Blue Cheese, Inc., will be $1.56 per share. The dividends are anticipated to maintain a growth rate of 4 percent forever. The stock currently sells for $29 per share.
What is the firms after-tax component cost : A company's 8% coupon rate, semiannual payment, $1,000 par value bond that matures in 20 years sells at a price of $577.36. The company's federal-plus-state tax rate is 35%. What is the firm's after-tax component cost of debt for purposes of calcu..
Compute the value of the reaction quotient q : A reaction has ?G = 10.0 kJ and ?G° = 15.0 kJ at a temperature of 50 °C. Calculate the value of the reaction quotient Q under these conditions.
The formal addition rule expressed the probability of a or : The formal addition rule expressed the probability of a or b as follows: p(a or b) =p(a)+p(b)-p(a and b). Rewrite the expression for p(a or b) assuming that the addition rule uses the exclusive or instead of the inclusive or (recall that the exclusiv..
What is the bonds current value : Power of Tower Inc. has bonds that mature in 6½ years with a par value of $1,000. They pay a coupon rate of 9% with semiannual payments. If the required rate of return on these bonds is 11% what is the bond's current value?
What is the origin of avalanche breakdown in a diode : A silicon diode has a doping profile such that ND = ax3. What is the depth of the junction assuming the p side is uniformly doped with NA per cubic cm. Assume the x origin is at an ideal ohmic contact on the n side of the diode.

Reviews

Write a Review

Finance Basics Questions & Answers

  How many days are in the cash cycle

Harry Joiner, Inc. currently has an inventory turnover of 15.7, a payables turnover of 9.6, and a receivables turnover of 8.1. How many days are in the cash cycle?

  What is the value of a preferred stock

1. (Preferred Stock Valuation) What is the value of a preferred stock where the dividend rate is 13 percent on a $100 par value? The appropriate discount rate for a stock of this risk level is 12 percent.

  Compute the net present value of a project

Compute the net present value of a project and the depreciation tax benefit from the retooling is reflected in the net cash flows in the table

  Investment management assignment

Prepare a report recommending the appropriate investment of AUD$3 million for a five year investment period for a particular investment client.

  Computation of value of the stock or market had no knowledge

Computation of value of the stock and which the market had no knowledge of prior to the announcement

  Domestic parent and foreign subsidiary

What major problem might arise with intercompany debt between a domestic parent and a foreign subsidiary or between subsidiaries in different countries? How has Hershey Foods dealt with this problem?

  Use afn model to compute the maximum growth rate

ABC has the following ratios: A*/so=1.6, L*/so=0.4, profit margin=0.10 and dividend payout ratio=0.45. Sales last year were 100 million dollar. Suppose the ratios remain constant and apply AFN model to determent the maximum growth rate

  What was the annual increase in the value of the certificate

In 2009, a $5 certificate from 1896 was sold for $10,500. What was the annual increase in the value of the certificate?

  Explain stock valuation with constant growth rates

Explain Stock Valuation with constant growth rates in the dividends and the required rate of return on the stock

  Find various stakeholders in publicly traded corporation

Determine who are the various stakeholders in a publicly traded corporation, and why is communication of financial reports important to them?

  Computing monthly mortgage payment

When June and Patrick Baker were "house hunting" 5-years ago, the mortgage rates were pretty high. The fixed rate on a thirty year mortgage was 8.75 percent while the fifteen year fixed rate was at 8 percent.

  The null hypothesis that two means are equal is true

"If the null hypothesis that two means are equal is true, where will 97% of the computed z-values lie between? Plus or minus"

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!

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