Find the market value of the bonds, Corporate Finance

Assignment Help:

Pfizer Incorporated has 2 million shares of common stock, selling at $18 each. The β of the stock is 1.5, T-bill rate is 6%, and the expected return on the market is 12%. Pfizer also has $20 million (face amount) of bonds, with coupon 6%, which will mature after 8 years. The required rate of return for the bondholders is 10%. Find the market value of the bonds. The income tax rate of Pfizer is 40%. Find the WACC of Pfizer.

Answer: 12.27%

Related Discussions:- Find the market value of the bonds

EBIT, Firm A has $10,000 in assets entirely financed with equity. Firm B al...

Firm A has $10,000 in assets entirely financed with equity. Firm B also has $10,000 in assets, but these assets are financed by $5,000 in debt (with a 10 percent rate of interest)

Case study, Hallo I have to prepare a case study in cooperate finance. It i...

Hallo I have to prepare a case study in cooperate finance. It is a balance sheet and different adjustments. I would need your help to reflect my results. Is this possible?

Test solution.free., Initial investment 1950000 net cash flow 2075246 disco...

Initial investment 1950000 net cash flow 2075246 discount 15% find irr. Please solve in detail. regards thanks. .

Project, I have a Finance project due and I was wondering if I could get so...

I have a Finance project due and I was wondering if I could get some help with it? Please advise. Thanks..

Definition of electronic banking and electronic money, Question: (a) G...

Question: (a) Give a definition of electronic banking and electronic money. (b) Outline the main differences between smart cards, credit cards and debit cards. (c) Giv

Taxable Income, The tax rates are as shown. Your firm currently has taxable...

The tax rates are as shown. Your firm currently has taxable income of $79,000. How much additional tax will you owe if you increase your taxable income by $30,000? Taxable Income

Mr, PROBLEM 1 A friend of yours, employed as a Tier 2 field service repres...

PROBLEM 1 A friend of yours, employed as a Tier 2 field service representative for a telephony corporation, wants your help as a financial specialist to determine the financial co

Market Beta, Nelson plc

Nelson plc

Estimate the dollar-equivalent or adjusted rate of return, In January 2009 ...

In January 2009 you bought a German stock portfolio for 6,000,000 Euros and sold it in December 2009 for 7,000,000 Euros. Assume that over the same period the dollar's exchange ra

INVESTMENT DECISION, You are a ceo of a sotware firm that has limited acces...

You are a ceo of a sotware firm that has limited access to debt equity markets. The average return on last year projects is 28 % . and cost of capital is 12%. would npv pr Irr be

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages