__________ is a condition in international trade when the value of the imports into a nation is greater than the value of its ex
2 answers:
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Answer:
WACC 10.42614%
Explanation:
<u>First we use CAPM to solve for the cost of equity</u>
risk free 0.04
market rate
premium market (market rate - risk free) 0.08
beta(non diversifiable risk) 1.1
Ke 0.12800
Then we calculate the WACC (weighted average cost of capital)
D 80,000 bonsd x 1,000 = 80,000,000
E 4,000,000 shares x 40 = 160,000,000
E+ D 80,000,000 + 160,000,000 = 240,000,000
equity weight: 2/3
liability weight: 1/3
Ke 0.128
Equity weight 0.6667
Kd 0.086
Debt Weight 0.3334
t 0.34
WACC 10.42614%
Answer:
Bond Price = $5,300,862.264 rounded off to $5,300,862.26
Explanation:
To calculate the price of the bond today, we will use the formula for the price of the bond. Assuming the bond is an annual bond, the semi coupon payment, number of periods and semi annual YTM will be,
Coupon Payment (C) = 6,000,000 * 0.06 * 6/12 = 180 ,000
Total periods (n) = 8 * 2 = 16
r or YTM = 0.08 * 6/12 = 0.04 or 4%
The formula to calculate the price of the bonds today is attached.
Bond Price = 180000 * [( 1 - (1+0.04)^-16) / 0.04] + 6000000 / (1+0.04)^16
Bond Price = $5,300,862.264 rounded off to $5,300,862.26
