Homework Answers
| Current Value of Debt | $ 1,050 | |
| Par Value of Debt | $ 1,000 | |
| Coupon Rate | 8% | |
| Tax rate | 21% | |
| Total Maturity Period (years) | 20 | |
| Remaining Maturity Period(years) | 19 | |
| Interest Payment | $ 80 | formula = Par Value of debt * Coupon rate |
| Interest Rate | 7.50% | formula=RATE(19,-80,1050,-1000,0) |
| Cost of Debt | 5.92% | formula= Market rate * (1- Tax rate) |
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20. Cost of Debt. Micro Spinoffs Inc. issued 20-year debt a year ago at par value...
20. Cost of Debt. Micro Spinoffs Inc. issued 20-vear debt a year ago at par value...
20. Cost of Debt. Micro Spinoffs Inc. issued 20-vear debt a year ago at par value with a coupon rate of 8%, paid annually. Today, the debt is selling at $1,050. If the firm's tax bracket is 21%. What is its percentage cost of debt? (LO13-4)
Micro Spinoffs Inc. issued 10-year debt a year ago at par value with a coupon rate...
Micro Spinoffs Inc. issued 10-year debt a year ago at par value with a coupon rate of 8%, paid annually. Today, the debt is selling at $1,280. If the firm’s tax bracket is 21%, what is its percentage cost of debt? Assume a face value of $1,000. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Micro Spinoffs Inc. issued 20-year debt a year ago at par value with a coupon rate...
Micro Spinoffs Inc. issued 20-year debt a year ago at par value with a coupon rate of 6%, paid annually. Today, the debt is selling at $1,130. If the firm’s tax bracket is 30%, what is its percentage cost of debt? Assume a face value of $1,000. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
just question 20. a. Use the CAPM to estmmave e b. Now use the constant growth...
just question 20.
a. Use the CAPM to estmmave e b. Now use the constant growth model to estimate the cL c. Which of the two estimates is more reasonable? 20. Cost of Debt. Micro Spinoffs Inc. issued 20-year debt a year ago at par value with a coupon rate of 8%, paid annually. Today, the debt is selling at $1,050. If the firm's tax bracket is 21%, what is its percentage cost of debt? (LO13-4) Whitchurch has preferred stock...
necmeuldLIILLUMIWLUMCLLIT Saved Check my work mode: This shows what is correct or incorrect for the work...
necmeuldLIILLUMIWLUMCLLIT Saved Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not ind Problem 13-20 Cost of Debt (L04) Micro Spinoffs Inc. issued 10-year debt a year ago at par value with a coupon rate of 6%, paid annually. Today, the debt is selling at $1,080. If the firm's tax bracket is 21%, what is its percentage cost of debt? Assume a face value of $1,000. (Do not...
1. Micro Advantage issued a $5,500,000 par value, 16-year bond a year ago at 95 (i.e.,...
1. Micro Advantage issued a $5,500,000 par value, 16-year bond a year ago at 95 (i.e., 95% of par value) with a stated rate of 8%. Today, the bond is selling at 105 (i.e., 105% of par value). If the firm’s tax bracket is 30%, what is the current after-tax cost of this debt? 2. Micro Advantage has $5,500,000 preferred stock outstanding that it sold for $22 per share. The preferred stock has a per share par value of $25...
Below is information regarding the capital structure of Micro Advantage Inc. On the basis of this...
Below is information regarding the capital structure of Micro Advantage Inc. On the basis of this information you are asked to respond to the following three questions: Required: 1. Micro Advantage issued a $5,950,000 par value, 19-year bond a year ago at 96 (i.e., 96% of par value) with a stated rate of 7%. Today, the bond is selling at 110 i.e., 110% of par value). If the firm's tax bracket is 40%, what is the current after-tax cost of...
Below is information regarding the capital structure of Micro Advantage Inc. On the basis of this...
Below is information regarding the capital structure of Micro Advantage Inc. On the basis of this information you are asked to respond to the following three questions: Required: 1. Micro Advantage issued a $5,700,000 par value, 18-year bond a year ago at 97 (i.e., 97% of par value) with a stated rate of 8%. Today, the bond is selling at 105 (i.e., 105% of par value). If the firm's tax bracket is 40%, what is the current after-tax cost of...
Check my work Below is information regarding the capital structure of Micro Advantage Inc. On the...
Check my work Below is information regarding the capital structure of Micro Advantage Inc. On the basis of this information you are asked to respond to the following three questions: 0.25 points eBook Required: 1. Micro Advantage issued a $5,650,000 par value, 19-year bond a year ago at 96 (i.e., 96% of par value) with a stated rate of 10%. Today, the bond is selling at 115 (i.e., 115% of par value). If the firm's tax bracket is 35%, what...
Answer questions 1 to 3 for Micro Advantage Below is information regarding the capital structure of Micro Advantage...
Answer questions 1 to 3 for Micro Advantage
Below is information regarding the capital structure of Micro Advantage Inc. On the basis of this information you are asked to respond to the following three questions: Required: 1. Micro Advantage issued a $5,650,000 par value, 19-year bond a year ago at 96 (i.e., 96% of par value) with a stated rate of 10%. Today, the bond is selling at 115 (.e., 115% of par value). If the firm's tax bracket is...
20. Cost of Debt. Micro Spinoffs Inc. issued 20-vear debt a year ago at par value with a coupon rate of 8%, paid annually. Today, the debt is selling at $1,050. If the firm's tax bracket is 21%. What is its percentage cost of debt? (LO13-4)
just question 20.
a. Use the CAPM to estmmave e b. Now use the constant growth model to estimate the cL c. Which of the two estimates is more reasonable? 20. Cost of Debt. Micro Spinoffs Inc. issued 20-year debt a year ago at par value with a coupon rate of 8%, paid annually. Today, the debt is selling at $1,050. If the firm's tax bracket is 21%, what is its percentage cost of debt? (LO13-4) Whitchurch has preferred stock...
necmeuldLIILLUMIWLUMCLLIT Saved Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not ind Problem 13-20 Cost of Debt (L04) Micro Spinoffs Inc. issued 10-year debt a year ago at par value with a coupon rate of 6%, paid annually. Today, the debt is selling at $1,080. If the firm's tax bracket is 21%, what is its percentage cost of debt? Assume a face value of $1,000. (Do not...
Below is information regarding the capital structure of Micro Advantage Inc. On the basis of this information you are asked to respond to the following three questions: Required: 1. Micro Advantage issued a $5,950,000 par value, 19-year bond a year ago at 96 (i.e., 96% of par value) with a stated rate of 7%. Today, the bond is selling at 110 i.e., 110% of par value). If the firm's tax bracket is 40%, what is the current after-tax cost of...
Below is information regarding the capital structure of Micro Advantage Inc. On the basis of this information you are asked to respond to the following three questions: Required: 1. Micro Advantage issued a $5,700,000 par value, 18-year bond a year ago at 97 (i.e., 97% of par value) with a stated rate of 8%. Today, the bond is selling at 105 (i.e., 105% of par value). If the firm's tax bracket is 40%, what is the current after-tax cost of...
Check my work Below is information regarding the capital structure of Micro Advantage Inc. On the basis of this information you are asked to respond to the following three questions: 0.25 points eBook Required: 1. Micro Advantage issued a $5,650,000 par value, 19-year bond a year ago at 96 (i.e., 96% of par value) with a stated rate of 10%. Today, the bond is selling at 115 (i.e., 115% of par value). If the firm's tax bracket is 35%, what...
Answer questions 1 to 3 for Micro Advantage
Below is information regarding the capital structure of Micro Advantage Inc. On the basis of this information you are asked to respond to the following three questions: Required: 1. Micro Advantage issued a $5,650,000 par value, 19-year bond a year ago at 96 (i.e., 96% of par value) with a stated rate of 10%. Today, the bond is selling at 115 (.e., 115% of par value). If the firm's tax bracket is...
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