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Jobisdone [24]
3 years ago
11

Williams Company plans to issue bonds with a face value of $600,000 and a coupon rate of 8 percent. The bonds will mature in 10

years and pay interest semiannually every June 30 and December 31. All of the bonds are sold on January 1 of this year. Determine the issuance price of the bonds assuming an annual market rate of interest of ____.
Business
1 answer:
gulaghasi [49]3 years ago
3 0

Answer:

Decide the issuance of cost of the bonds:  

The issuance cost of bonds is the sum the obliged substance raised through the issue of legally binding proclamation called bonds. The cost of securities relies on the assumed worth, time frame, the coupon rate and the market rate.  

Coming up next are three general standards regarding bonds issue cost:  

  1. On the off chance that the coupon pace of the security is equivalent to the market loan fee, at that point the security is said to be given at standard.  
  2. On the off chance that the coupon pace of the security is more prominent than the market financing cost, at that point the security is said to be given at premium.  
  3. On the off chance that the coupon pace of the security is lower than the market loan cost, at that point the security is said to be given at rebate.  

In the current case, both the coupon rate and the market premium are 8% and are equivalent. Thus, the issue cost of bonds is equivalent to the standard worth. That is $600,000.

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Answer:

The Maigold's free cash flow can be calculated using the below formula:

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Explanation:

Cash provided by operations   $21700

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Dividends paid                          ($3500)

Free cash flow of Maigold's     $8100

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Astro Co. sold 20,500 units of its only product and incurred a $67,750 loss (ignoring taxes) for the current year as shown here.
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Answer:

Break even point in dollar sales = $1,050,000

Explanation:

Break Even Point in dollar sales = Fixed Cost/ Contribution margin percentage

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Contribution margin = $194,750

Sales = $779,000

Contribution margin percentage = ($194,750/$779,000) X 100 = 25%

Break even point in dollar sales = Fixed Cost $262,500/25%

= $1,050,000

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Answer:

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