Debt issue will provide the following amount to the firm:-
=Face value*(1-fees)
=175*(1-4.5%)
=167 million
A firm issues 5175 million in straight bonds at par and a coupon rate of 7%....
please provide ste by step analysis
19. A firm issues two-year bonds with a coupon rate of 6.7%, paid semiannually. The credit spread for this firm's two vear debt is 0.8%. New two-year Treasury notes are being issued at par with a coupon rate of 3.1%. What should the price of the firm's outstanding two-year bonds be per $100 of face value?
8, A firm issues a 5-year par bond with a coupon rate of 10% and a face value of $1000. The price of the bond is $900. What is this bond's yield-to-maturity? 9. What is the first-year capital gains yield of the bond in Question 8?
A firm issues $30,000,000 of 10-year bonds and receives $29.5 million in cash. Which of the following statements is correct? a. The bonds do not have a coupon rate because they are zeros. b. The market rate exceeds the coupon rate. c. The contract rate exceeds the market rate. d. The bonds were issued at par.
A company issues a ten-year bond at par with a coupon rate of 7% paid semi-annually. The YTM at the beginning of the third year of the bond (8 years left to maturity) is 9%. What is the new price of the bond? O A. $1,065 O B. $888 OC. $1,243 OD. $1,000
A firm has $90 million of bonds outstanding. The bonds have 7.4% annual coupon rate, pay semiannual coupons, and have 15 years to maturity. They sell for 109% of par. What is the firm's pretax cost of debt, expressed as an EAR? Enter a number as a percentage with three digits after the decimal, such as 6.374 if the answer is 6.374%.
All else being equal, if a firm issues $100 million in 10% bonds and uses the proceeds to repurchase common stock that pays dividends of $10 million per year, all of the following will occur, except: 1)income taxes will decrease 2) net income will decrease 3)interest expense will increase 4)net cash available for other needs will decrease
A $150 million pool of 15-year mortgages has a weighted average coupon of 3.5% per year, and pass-through securities backed by the pool have a coupon of 3.0% per year. Guarantee and service fees are 0.5% per year of the pool principal balance at the beginning of each month. The pool has mortgages with $73 million of principal outstanding at the beginning of the month. During the month, payments for scheduled principal, interest, and prepaid principal total $1,096,764. If you...
price E9-19 On January 1, 2021, Water World issues $26 million of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. Water World intends to use the funds to build the world's largest water avalanche and the "tornado"-a giant outdoor vortex in which riders spin in progressively smaller and faster circles until they drop through a small tunnel at the bottom. Required: 1. If the market rate is 6%, will the...
1-Bushwhacker Mowing needs $360 million to support growth. If it issues new common stock to raise the funds, the flotation (issuance) costs will be 4 percent. If Bushwhacker can issue stock at $60 per share, how many shares of common stock must be issued so that it has $360 million after flotation costs? Show how much of the issue will consist of flotation costs and how much Bushwhacker will receive after flotation costs are paid. 2-Mom's Motel Corporation (MM) plans...
State Street Beverage Company issues $812,000 of 8%, 10-year bonds on March 31, 2017. The bonds pay interest on March 31 and September 30. Which of the following statements is true? O A. If the market rate of interest is 9%, the bonds will issue at a premium. OB. If the market rate of interest is 9%, the bonds will issue at par. OC. If the market rate of interest is 9%, the bonds will issue above par. OD. If...