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zzz [600]
3 years ago
13

Cost of Debt KatyDid Clothes has a $150 million (face value) 30-year bond issue selling for 104 percent of par that carries a co

upon rate of 11 percent, paid semiannually. What would be Katydid’s before-tax component cost of debt?
Business
1 answer:
Ivahew [28]3 years ago
5 0

Answer:

the annual pre-tax cost of debt is 10.56%

Explanation:

the beore-tax component cost of debt will be the actual market rate of the bonds, as they offer an interest rate of 11% but are selling at 104 points not at par thus, there is a difference between the rates.

We solve for the rate which makes the coupon and maturity 104

with excel or a financial calculator

PV of the coupon payment

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 5.500 (100 x 11%/2)

time 60 (30 years x 2 payment per year)

rate <em>0.052787474</em>

5.5 \times \frac{1-(1+0.0527874736258532)^{-60} }{0.0527874736258532} = PV\\

PV $99.4338

PV of the maturity

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity   100.00

time   60.00

rate  <em>0.052787474</em>

\frac{100}{(1 + 0.0527874736258532)^{60} } = PV  

PV   4.57

<em><u>Adding both we should get 104 which is the amount the bonds is selling:</u></em>

PV coupon $99.4338 + PV maturity  $4.5662 = $104.0000

The rate is generated using goal seek or wiht a financial calculator.

This rate is a semiannual rate, so we multiply by 2 to get the annual cost of debt:

0.052787474 x 2 = 0.105574947

The cost of debt for the firm is 10.56%

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Answer:

Answer for the question:

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If you have 4.00 gg of H2, how many grams of NH3 can be produced?
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Answer:

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Explanation:

The balanced equation for this would be:

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So let's take note of this:

We will need 3 moles of H₂ to produce 2 moles of NH₃.

Now let us convert:

First we determine the molar mass of H2:

Element:

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Let's see how many moles of H2 there are in 4.00g

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N      =   1 x 14.01 = 14.01

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1.32\;moles\;of\;NH_3\times\dfrac{17.04g\;of\;NH_3}{1\;mole\;of\;NH_3} = 22.49g\;of\;NH_3

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