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Butoxors [25]
3 years ago
7

, suppose the book value of the debt issue is $70 million. In addition, the company has a second debt issue on the market, a zer

o coupon bond with 12 years left to maturity; the book value of this issue is $100 million and the bonds sell for 61 percent of par. What is the company’s total book value of debt? The total market value? What is your best estimate of the aftertax cost of debt now? (Assume that semi-annual compounding is used for the zero-coupon bond.)
Business
1 answer:
vlada-n [284]3 years ago
5 0

Answer: See explanation

Explanation:

a. The company's total book value of debt will be:

= Value of debt + Value of zero coupon bonds

= $70 million + $100 million

= $170 million

b. The market value will be:

= Quoted price × Par value

= ($70 × 1.08) + ($100 × 0.61)

= $75.6 + $61

= $136.6 million

c. The aftertax cost of debt will be:

= (1 - Tax rate) × Pre tax cost of debt

= (1 - 35%) × 5.7%

= 65% × 5.7%

= 3.7%

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A manufacturing company that produces a single product has provided the following data concerning its most recent month of opera
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Explanation:

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7 0
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Answer:

c.$188,150

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*Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month. **Insurance expense is $870 a month; however, the insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October). ***Property tax is paid once a year in November.

5 0
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The statement that accurately describe the innovations that they've made is :
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hope this helps
4 0
3 years ago
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levacccp [35]

Answer:

I have attached the excel file which shows the entire calculation of all the parts of your question. Majority of the numbers are linked so that its easy for you to understand. Key points before you look into file.

1) Number of units have derived by dividing revenue over sales price per unit which is $5

2) Production units are calculated by dividing total sales unit by 12 (as mentioned in the question)

3)Keep in mind that 80% of revenue will be received next month of the sales therefore also include in January sales receipt the 80% revenue of previous month

Explanation:

Download xlsx
7 0
3 years ago
Read 2 more answers
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