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Pearce’s Cricket Farm issued a 25-year, 12 percent semiannual bond 3 years ago. The bond currently sells for 94 percent of its face value. The company’s tax rate is 38 percent. Suppose the book value of the debt issue is $40 million. In addition, the company has a second debt issue on the market, a zero coupon bond annually with 14 years left to maturity; the book value of this issue is $45 million and the bonds sell for 53 percent of par. What is the company’s total book value of debt? (Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.) Total book value $ What is the company’s total market value of debt? (Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.) Total market value $ What is your best estimate of the after-tax cost of debt? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
How would you expect the cost of the bond with warrants to compare with the cost of straight debt?
Perplexed by the declining profit margin and the rate of growth of EASY's net income, Melissa Hampton pressed the company management for more information.
A company's stock is currently selling for $20 per share. Suppose you hold 800 of this company's shares that you bought last year at $15.60 a share. The company intends to pay out to its shareholders $1 per share, either by direct dividend payment or..
How much can Janet save annually by using the better plan?
Hula Enterprises is considering a new project to produce solar water heaters. the debt capacity is 50 cents for every dollar of asset value.
what is the profit generated by this strategy if the fund manager view of market comes true accurately by august 2016 and she unwinds her trades.
Faircross Farms harvests its crops four times annually and receives payment for its crop 90 days after it is picked and shipped. However, planting, irrigating, and harvesting must be done on a nearly continual schedule. What is the effective annual i..
Burton, a manufacturer of snowboards, is considering replacing an existing piece of equipment with a more sophisticated machine. The following information is given. The proposed machine will cost $120,000 and have installation costs of$15,000. lt wil..
The following information about the operations of Hancock Company is available. Find the NPV of its operating cycle. What is the new NPV if Hancock can delay the payments by 2 days and make the collections 2 days earlier? By comparing the answers to ..
Bob sells a stock investment for $45,000 cash, and the purchaser assumes Bob's $32,500 debt on the investment. The basis of Bob's stock investment is $55,000. What is the gain or loss realized on the sale?
Tangshan China's stock is currently selling for $160.00 per share and the firm's dividends are expected to grow at 5 percent indefinitely. Assuming Tangshan? China's most recent dividend was $5.50, what is the required rate of return on Tangshan's st..
use the? dividend-discount model to estimate its value per share at the end of 2009. The price per share is $---------- . (Round to the nearest? cent.)
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