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jeka94
3 years ago
8

Suppose your company needs to raise $68 million and you want to issue 20-year bonds for this purpose. Assume the required return

on your bond issue will be 4.4 percent, and you’re evaluating two issue alternatives: A semiannual coupon bond with a coupon rate of 4.4 percent and a zero coupon bond. Your company’s tax rate is 24 percent. Both bonds will have a par value of $1,000. How many of the coupon bonds would you need to issue to raise the $68 million?
Business
1 answer:
e-lub [12.9K]3 years ago
6 0

Answer:

you would need 68000 of the coupon bonds to issue to raise the $68 million.

Explanation:

price of the coupon bond = $1000

number of coupon bond = $68 million/1000

                                          = 68000

Therefore, you would need 68000 of the coupon bonds to issue to raise the $68 million.

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The business sectors identified in QUESTION 1.3.1
emmainna [20.7K]

Explanation:

poor network , poor electircity

4 0
3 years ago
In an imaginary economy, consumers buy only razors and cologne. The fixed basket consists of 6 razors and 4 bottles of cologne.
Hitman42 [59]

Answer:

The answers are:

  1. The CPI for 2009 is 100 (since it is the base year)
  2. The CPI for 2010 is 129.17
  3. The inflation rate for 2010 is 29.17%

Explanation:

<u>CPI basket for 2009</u>

  • 6 razors x $20 per razor = $120
  • 4 bottles of cologne x $30 per bottle = $120

The total value of the CPI basket for 2009 is $240

<u>CPI basket for 2010</u>

  • 6 razors x $25 per razor = $150
  • 4 bottles of cologne x $40 per bottle = $160

The total value of the CPI basket for 2010 is $310

  1. The CPI for 2009 is 100, since it is the base year
  2. The CPI for 2010 = (CPI basket 2010 / CPI basket 2009) x 100 = ($310 / $240) x 100 = 129.17
  3. The inflation rate for 2010 = [(CPI basket 2010 / CPI basket 2009) - 1] x 100 = (1.2917 - 1) x 100% = 29.17%

3 0
2 years ago
Suppose someone takes out a home improvement loan for $30,000. The annual interest on the loan is 6% and is compounded monthly.
dsp73

Answer:

Explanation:

Monthly interest = 6 / 12 = .005

principal amount a₀ = 30000

an denote the amount owed at the end of the month

amount owed at the end of one month

a₁= 1.005 x a₀ - 600

amount owed at the end of 2 nd  month

a₂= 1.005 x a₁ - 600

amount owed at the end of nth month

an =  1.005x an-1  - 600 for n ≥ 1

4 0
3 years ago
Crane Company's accounting records reflect the following inventories: Dec. 31, 2017 Dec. 31, 2016 Raw materials inventory $21000
TiliK225 [7]

Answer:

$910,000

Explanation:

Given the above information, total raw materials available for use during 2017 is calculated below;

= Beginning raw materials + Purchases

Beginning raw materials = $210,000

Purchases = $700,000

Then,

Total raw materials available for use during 2017 for Crane company

= $210,000 + $700,000

= $910,000

5 0
2 years ago
You are considering buying shares of stock in the Steel Mill. The forecast for the firm is steady growth over the next decade. T
allsm [11]

Answer:

The stock price will be $25.72 in ten years from now.

Explanation:

The stock price in ten years from now will be equal to the present value of perpetual growth dividend stream from the stock; with the first dividend in the stream is the eleventh year dividend which is calculated as: Dividend in Year 0 x (1+growth rate)^11 = 1.42 x 1.04^11 = $2.186.

So, the stock price will be calculated as:

Stock price = 2.186/ ( 12.5% - 4%) = $25.72.

So, the answer is: The stock price will be $25.72 in ten years from now.

8 0
3 years ago
Read 2 more answers
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