Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Sui Bian Ltd. has a callable outstanding bond issue with a face value of $5 million, which was issued ten years ago at flotation cost 5% of the face value. The bond has 10 years remaining to the maturity date and a coupon rate of 12% paid annually. The call premium of the old bonds is 50% of the annual coupon rate.
Interest rates at the time of the issue were considerably higher than they are now and the company would now like to refinance the bonds. The new bonds of 10-year maturity could be issued at a coupon rate of 8% paid annually. The call premium of the new bonds is 60% of the annual coupon rate. The flotation costs associated with the new bond issue are 4% of the face value.
The new bonds would be issued one month before the old bonds could be called. Firm's corporate tax rate is 35%. The current T-Bill rate is 3%.
1. What is the net flotation costs associated with the new issue of bonds, i.e. the difference between the total flotation cost and the present value of the tax savings from the flotation costs?
2. What is net additional interest expense during the overlap period?
3. What is the NPV of the refund the old bonds and issue new bonds?
Your uncle has $375,000 and wants to retire. He expects to live for another 25 years and to earn 7.5% on his invested funds. How much could he withdraw at the end of each of the next 25 years and end up with zero in the account?
Could an entity decide to exclude the premium of an interest rate futures or forward contract from its assessment of hedge effectiveness?
You're trying to determine whether or not to expand your business by building a new manufacturing plant. The plant has an installation cost of $20.2 million
Determine the correct statement regarding profit sharing plans.
Include a cover page containing the title of the assignment, the student's name, the professor's name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
Dermine the following: a. The economic order quantity b. The total annual inventory costs c. The optimal ordering frequency
A 10-year bond, with par value equals $1000, pays 10 percent yearly. If similar bonds are currently yielding 6 percent yearly, calculate the market value of the bond.
1. Reflect on the importance of present and future values. 2. What factors must be considered when calculating present and future values?
Which of the bonds trades at a greater premium to its present value? Show your work and explain how you arrived at your answer.
1. What factors led to the accounting issue? Who do you think is responsible for the accounting issue? Accounting Fraud at Tesco Stores
take an approved federal state local project form one of the following government agencies - department of education
Calculate the change in the firm's EPS from this change in capital structure. (Do not round intermediate calculations and round your final answers to 2 decimal
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd