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katen-ka-za [31]
3 years ago
8

Beckham corporation has semiannual bonds outstanding with 13 years to maturity and the bonds are currently priced at $746.16. if

the bonds have a coupon rate of 8.5 percent, then what is the after-tax cost of debt for beckham if its marginal tax rate is 35%? round your intermediate calculation to two decimal places & final percentage answer to three decimal places. 12.890% 6.250% 8.125% 12.500%
Business
1 answer:
gladu [14]3 years ago
4 0
First of all find YTM: N= 13*2=26PV=  -746.16PMT: 1000*.085= 85/2 = 42.50FV= 1000CPT-- I/Y= 6.25*2 = 12.50
Adjustment of Taxes:12.5/100 = 0.125 x(1-0.35) = 8.125% Ans

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Answer:

The price of the stock today is $15.63

Explanation:

The three stage Dividend Discount model will be used to calculate the price of this stock as the dividends are growing at three different growth rates. These dividends will be discounted back to calculate the price of the stock today.

The price per share today under this model will be:

P0 = D1 / (1+r) + D2 / (1+r)^2 + ... + Dn / (1+r)^n + [Dn * (1+gC) / (r - gC)] / (1+r)^n

Where,

  • D1 is the dividend expected for the next period of Year 1.
  • gC is the constant growth rate or third stage growth rate that will last forever.

P0 = 1.25 / (1+0.2)  +  1.25 * (1+0.4) / (1+0.2)^2  +  1.25 * (1+0.4) * (1+0.2) / (1+0.2)^3  +  1.25 * (1+0.4) * (1+0.2)^2  /  (1+0.2)^4  +  

[1.25 * (1+0.4) * (1+0.2)^2 * (1+0.08)  /  (0.2 - 0.08)]  /  (1+0.2)^4

The P0 = $15.625 rounded off to $15.63

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On January 1, Year 1, Frost Co. entered into a 2-year lease agreement with Ananz Co. to lease a new computer. The lease term beg
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Annual lease payments = $8,000

Present value of the minimum lease payments = $13,000

Fair value of the computer = $14,000

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On November 7, Mura Company borrows $370,000 cash by signing a 90-day, 8%, $370,000 note payable. 1. Compute the accrued interes
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Answer:

At 31 December, the Interest for 54 days accrues as follows :

Interest expense $17,740 (debit)

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Note Payable $370,000  (credit)

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Interest expense $17,740 (debit)

Note Payable $17,740 (credit)

Interest expense calculation = $370,000 × 8% × 54/90

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Interest expense calculation = $370,000 × 8% × 60/90

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Note Payable $407,473 (debit)

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Note Payable Calculation = $370,000 + $19,733 + $17,740

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