Which sinking-fund amounts should the firm call

Assignment Help Business Economics
Reference no: EM132408736

IBM has $150 million of 10% sinking-fund debentures out- standing. The issue amortizes in equal annual amounts at the ends of years 10, 11, and 12. The firm can call the bonds at 103%. Its new issue rate is 8% for 10-year debt, 8.5% for 11-year debt, and 9% for 12-year debt. Its marginal income tax rate is 40%. Which sinking-fund amounts should the firm call?

Reference no: EM132408736

Questions Cloud

Average ipo appreciate the first day : By what amount does the average IPO appreciate the first day; that is, what is the average IPO underpricing?
Implement authentication and authorization : Design, implement and test a solution based on the given requirements and Use server-side scripting language PHP to implement a database-driven solution
What is the coefficient of variation for panda : Panda INC. stock has an expected return of 9% and a standard deviation of 12%. What is the coefficient of variation for Panda?
Calculate the effective annual rates for loan : Calculate the effective annual rates for each loan, and indicate which loan offers the better terms.
Which sinking-fund amounts should the firm call : Its new issue rate is 8% for 10-year debt, 8.5% for 11-year debt, and 9% for 12-year debt. Its marginal income tax rate is 40%.
Calculate the semiannual after-tax savings : a. Calculate the semiannual after-tax savings that would result if the firm issued $50 mil lion of 12.5% debt.
Calculate the operating cycle based on information : Calculate the operating cycle based on the following information: Sales = $60,812, COGS = $30,940, Inventory = $8,264, Accounts Receivable = $19,706
What do the dupont equations from 2018 : What do the DuPont equations from 2018 tell us about Williams Company compared to Blumer Co?
What is the expected return on overall stock market : Assume that the risk-free rate of return is 5 percent and the market risk premium is 6 percent. What is the expected return on the overall stock market?

Reviews

Write a Review

Business Economics Questions & Answers

  Draw a graph of households budget budget

Draw a graph of this households budget budget. Label the intercepts and any kinks (bends) in the budget constraint.

  Firm ic acutely aware of production and marketing decisions

In oligopoly, each firm is acutely aware of the production and marketing decisions of all competitors and carefully considers the potential competitive reactions in all decisions. Discuss whether firms in other market structures consider the potentia..

  Calculate the inflation-adjusted principal at the beginning

Consider an investor who, on January 1, 2016, purchases a TIPS bond with an original principal of $100,000, an 8 percent annual (or 4 percent semiannual) coupon rate, and 10 years to maturity. From your answer to part a, calculate the inflation-adjus..

  Your decision to purchase which product

Explain how advertising did or did not play a key role in your decision to purchase which product. Why might it be excessive at times.

  Qq10000-1000p005pop06103awhere q is quantity p is cost

q1. q10000-1000p0.05pop0.610.3awhere q is quantity p is cost pop is population i is disposable income per capita and

  Show the effects of this on the bond market

Show the effects of this on the bond market and money market by drawing a supply and demand diagram for each. Assume the liquidity effect is the only effect.

  Illustrate which currently operates out of an office

Illustrate which currently operates out of an office in a small town near Boston, just discovered a vacancy in an office building in downtown Boston

  Evaluate competitive advantage potential of cross-business

Evaluate competitive advantage potential of cross-business strategic fits among the various business units. Check whether firm's resources fit requirements of its present businesses.

  Explain how does monetary policy work to close inflationary

Explain how does monetary policy work to close an inflationary and recessionary gap using the keynesians model and what is the link.

  Compute the price index

?Jim's favorite breakfast is two? eggs, 1/5 lb. of? bacon, 1/7 lb. of white? toast, 1/6 can? (16 ounce? can) of frozen concentrate orange? juice, and 1 lb. of grapefruit. The following table contains 1991 and 2001 prices for these five items. Using 1..

  Explain two elastic and inelastic goods

Explain two elastic and inelastic goods that you have recently purchased/not purchased when the price increased of those products. Please relate your answer to the market characteristics.

  What are the likely consequences of such a policy

A new Fed governor argues during FOMC meetings that the Fed has not sufficiently achieved the goal of helping the economy reach its potential level of output. She asks the committee to be more aggressive, using expansionary monetary policy to increas..

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