Great Lakes Packing has two bond issues outstanding. The first issue has a coupon rate of 3.54 percent, a par value of $1,000 per bond, matures in 4 years, has a total face value of $3.8 million, and is quoted at 103 percent of face value. The second issue has a coupon rate of 6.10 percent, a par value of $2,000 per bond, matures in 23 years, has a total face value of $8.1 million, and is quoted at 95 percent of face value. Both bonds pay interest semiannually. The company's tax rate is 39 percent. What is the firm's weighted average aftertax cost of debt

Answers

Answer 1

Answer:

3.20%

Explanation:

The firm's weighted average aftertax cost of debt can be determined by first of all determining the before-tax cost of each debt.

Using a financial calculator, the before-tax costs of debt are ascertained as follows:

Bond 1:

N=8(number of semiannual coupons in 4 years)

PMT=17.70  (semiannual coupon=face value*coupon rate/2=$1,000*3.54%/2=$17.70)

PV=-1030(current price=$1000*103%=$1030)

FV=1000(the face value is $1000)

CPT

I/Y=1.37%(the semannual yield, annual yield=1.37%*2=2.74%)

after-tax cost of first debt=2.74%*(1-39%)=1.67%

Bond 2:

N=46(number of semiannual coupons in 23  years)

PMT=30.50 (semiannual coupon=face value*coupon rate/2=$1,000*6.10%/2=$30.50)

PV=-950(current price=$1000*95%=$950)

FV=1000(the face value is $1000)

CPT

I/Y=3.26%%(the semannual yield, annual yield=3.26%%*2=6.52%)

after-tax cost of second debt=6.52%*(1-39%)=3.98%

market value of first debt=$3.8 million*103%=$3,914,000

market value of second debt=$8.1 million*95%=$7,695,000

total market value of debts=$3,914,000+$7,695,000=$11,609,000

firm's weighted average aftertax cost of debt=(1.67%*$3,914,000/$11,609,000)+(3.98%*$7,695,000/$11,609,000)

firm's weighted average aftertax cost of debt=3.20%


Related Questions

Describe a hypothetical government budget that employs an expansionary policy.

Answers

Answer:

Expansionary fiscal policy involves strategy which includes tax cutting, rebates and increase spending.

Explanation:

The government budget will be modified to the tax cutting strategies to implement expansionary fiscal policies. This includes increase in spending so that less money is saved and the tax amount on the profit is minimum.

what is 5669-56+6-1+76-1234567890

dont answer

Answers

Answer:

okay

Explanation:

Answer:

-1234562196

Explanation:

for which person would renting a home be a better option than getting a mortgage?

Answers

Answer:

Someone who wants ro avoid spending time and money on maintenace

Explanation:

Write a brief note on Axioms of interpersonal communication with example of real life business communication.

Answers

Answer:

axiom shows that everything one does is a message: "Activity or inactivity, words or silence all have message value: they influence others and these others, in turn, cannot not respond to these communications and are thus themselves communicating" (Watzlawick, Beavin, and Jackson, 1967, p. 1). This is true only however if the parties are "in the presence of another" (Watzlawick & Beavin, 1967, p. 4). This can cause problems in the relationship system though. For example, if one doesn’t want to communicate and inadvertently communicates this fact it may anger the other party. The appreciation for people who behave emotionally reserved verses who express their thoughts and feelings freely, may differ considerately between cultures. Insensitivity to these differences or the signals that people send, may hinder or undermine a smooth acculturation process considerately

Explanation:

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[tex]\large\colorbox{darkred}{Xxᴊᴀsʜ13xX}[/tex]

The rate card for a magazine mentioned that the one-time cost for a full-page black-and-white ad was $930. The magazine had a total circulation of 15,000. Calculate the magazine's cost per thousand (CPM).

Answers

Answer:

Magazine's cost per thousand (CPM) = $62

Explanation:

Given:

Cost per card = $930

Total number of cards = 15,000

Find:

Magazine's cost per thousand (CPM)

Computation:

Magazine's cost per thousand (CPM) = [Cost per card x 1,000] / Total number of cards

Magazine's cost per thousand (CPM) = [930 x 1,000] / 15,000

Magazine's cost per thousand (CPM) = 930,000 / 15,000

Magazine's cost per thousand (CPM) = $62

Given an actual demand of 63 a previous forecast of 58 and an alpha of .3 what would the forecast for the next period be using simple exponential smoothing ?

Answers

Answer:

The forecast for the next period based on simple exponential smoothing is 59.50

Explanation:

In determining the forecast for the period using the exponential smoothing approach, the below formula is of utmost importance:

forecast=(α*prior period actual)+(1-α)*prior period forecast

α =alpha=smoothing constant =.3

prior period actual=63

prior period forecast=58

forecast for the next period=(.3*63)+(1-.3)*58

forecast for the next period=18.90+40.60

forecast for the next period=59.50

An injunction that requires a defendant to take an action or set of actions is
an) injunction
A. permanent
B. prohibitory
C. mandatory
Ο Ο
D. interim

Answers

Answer:

C. mandatory

Explanation:

A law can be defined as the system of principles, regulations and rules established by legislature, that is adopted in a community, society or country to regulate the actions of its citizens, members or employees.

Thus, law is a tool used by the judiciary, lawyers, individuals, organizations, and even government to ensure everybody is well behaved, non-criminal and civil in their actions. Therefore, a law creates the foundation for ethical behavior.

In circumstances where there are aberration, the law is enforced as a punishment and penalty for wrongdoings or misdeeds.

There are various types of law and these includes; criminal law, constitutional law, intellectual property law, corporate law, international law, family law, civil law, etc.

An injunction can be defined as a legal and equitable court order compelling (commanding) or prohibiting an individual, group or entity to either perform or cease from performing a specific action.

Basically, a court of competent jurisdiction is empowered by law to grant an injunction to a third party for further examination and trial.

Similarly, an injunction that requires a defendant or plaintiff to take an action or set of actions is a mandatory injunction.

Answer:

C. mandatory

Explanation:

Temporary and Permanent Injunctions ( Sections 36 & 37)Perpetual Injunctions ( Section 38)Mandatory Injunctions ( section 39)Damages in lieu of or in addition to Injection( Section 40)Injunction to perform a negative covenant( section 42)

What is the importance of international law to businesses engaged in international trade?

Answers

Answer:

The above pic might help you :)

Anytown households that earn more than $75,000 tend to buy sports equipment, while households that earn less than $75,000 tend to buy TVs. Which new business would be most likely to succeed

Answers

Answer:

an electronics store

Explanation:

This is so because there is more population that earns less than $75,000 and they are people that like to spend their money on buying electronics such as TVs. So a new business dedicated to selling electronics (TVs, computers, mobile phones, and so on) could have a great opportunity with this population. More people would be attracted to visit the shop location or buying online.

Hope this answer helps you :)

Have a great day

Mark brainliest

Answer: B (electronic store)

A corporation has 3000 shares, 10% preferred stock of $55.00 par preferred stock, and 6000 shares of common stock outstanding. The net income for the year is $300,000. Calculate earnings per share. (Round your answer to the nearest cent.)

Answers

Answer:

the earning per share is $47

Explanation:

The computation of the earning per share is shown below;

= (Net income - preference dividend) ÷ number of common stock outstanding

= ($300,000 - (3000 × $55 × 10%) ) ÷ 6,000 shares

= $47.25

= $47 per share

Hence the earning per share is $47

Casassa, a merchant in San Francisco, under the terms of a nonshipment contract, agrees to sell 50 cases of packaged macaroni to Paoli, a restaurant owner whose business is in San Jose. At the time of contracting for the sale, both parties are aware that these identified goods are in a warehouse in Fresno. The place for delivery is not specified in the agreement. On the basis of these facts, the place for delivery is

Answers

Answer:

Fresno

Explanation:

A contract can be defined as an agreement between two or more parties (group of people) which gives rise to a mutual legal obligation or enforceable by law.

There are different types of contract in business and these includes: fixed-price contract, cost-plus contract, bilateral contract, implies contract, unilateral contract, adhesion contract, unconscionable contract, option contract, express contract, executory contract, etc.

The uniform commercial code (UCC) is a set of standardized business laws which are put in place for the regulation of financial contracts and commercial transactions used across different states in the United States of America. There are special rules known as the special business standards that are set up by UCC governing merchants and the sales of goods in Article 2 of the Uniform Commercial Code.

Under Article 2 of the Uniform Commercial Code, a shipment contract between two parties (buyer and seller) states that a buyer bears the risk of loss and is typically responsible for the costs of goods in the event of any damage or loss incurred during transportation and prior to receiving the goods.

In this scenario, the transaction is a nonshipment contract and the place for delivery is not specified in the agreement.

However, on the basis of the facts that both parties are aware that the 50 cases of packaged macaroni are in a warehouse in Fresno, the place for delivery is Fresno.

You will need to complete the resumé worksheet for this assignment. Put the information into the box below for your grade.

Answers

Put the resumé worksheet so I will be able to help you with it

Which of the following is true regarding the formula for success of an enterprise system?
A) Enterprise systems implementations should include personnel from different departments.
B) The success of an enterprise system depends directly on the support received from middle-management.
C) Enterprise systems are simple to understand and implement when compared to stand-alone systems.
D) Using outside consultants tends to complicate the implementation of an enterprise system.
E) Once enterprise systems go live, employees experience an immediate growth in productivity.

Answers

Answer:

A) Enterprise systems implementations should include personnel from different departments.

Explanation:

An organizational structure can be defined as the process which typically involves dividing an organization into various functional units.

A functional (departmental) organizational structure is a type of structure used to organize staffs by dividing them into various departments based on their skill set, roles or functions and knowledge.

These departments which are vertically structured may include, finance, IT, sales and marketing, research and development, customer service etc. Also, the various departments are headed by a functional manager who are saddled with the responsibility of overseeing, managing and reporting to the executive management.

The employees in companies engaged in a single line of business are generally referred to as silos because they work independently, collaborate and communicate with their colleagues in a vertical style i.e exclusively with each other.

Hence, the formula for success of an enterprise system is that, all enterprise systems implementations should include personnel or employees from different departments such as accounting, marketing, human resources, customer relationship, procurement, etc.

A laissez-faire leader will give their employees as much ( ) as possible
A) MONEY
B) WORK
C) FREEDOM

Answers

I think it’s B Work

Explanation:

The Answer is gonna be B) Work

This is the right Answer :3

I hope you are having a great day ❤️❤️❤️❤️

Maddox Auto Parts, Inc., contracted with Billy's Mufflers Co. to purchase 35 mufflers from their warehouse supplies. All the mufflers Maddox Auto Parts ordered were already made and packaged and merely required transportation to Maddox Auto Parts. Billy's Mufflers wrote out an order form designating which 35 mufflers were to go to Maddox Auto Parts. If a question as to when Maddox Auto Parts acquired an insurable interest in the mufflers were to arise, a court would likely hold that
Maddox Auto Parts gained an insurable interest in the mufflers:
A. at the time of contracting.
B. at the time the mufflers were
C. given to the carrier.
D. at the time of delivery.
E. 24 hours before delivery.

Answers

Answer: A. at the time of contracting.

Explanation:

Insurable interest is the reasonable concern to obtain insurance against unforeseen events such like losses or death. Insurable interest is when the loss of an object or damage would result in a financial loss.

Based on the information given, Maddox Auto Parts gained an insurable interest in the mufflers at the time of contracting. An individual will gain an insurable interest immediately s contract takes place.

Therefore, the correct option is A.

There is a _______ relationship between real GDP and tax revenues, which partially explains deficit spending during a recession.

positive
contradictory
inconsequential
negative

Answers

Answer: positive

Explanation:

The real gross domestic product refers to the value of the output in an economy which has been adjusted for price changes.

There's a positive relationship between the real GDP and tax revenues. This can be used to explain deficit spending during a recession. When there's recession, there'll be a reduction in the output and consumption in the economy. At this point, there'll be a reduction in GDP.

Without creating a separate business organization, Rey starts up Street Cruisers, a pre-owned auto sales enterprise. This enterprise is

Answers

A dole proprietor(the answer)(you’re welcome)

Based on the fact that Rey did not create a separate business organization, the enterprise is a Sole Proprietorship.

What is a sole proprietorship?

This refers to a business that is owned and operated by an entrepreneur who is not considered separate from the business.

This means that any liabilities of the business are the person's liabilities of the owner who in this case is Rey.

In conclusion, this is a sole proprietorship.

Find out more on sole proprietorships at https://brainly.com/question/4442710.

what is construction production​

Answers

Answer:

The production in construction index is a business-cycle indicator which measures the monthly changes in production of buildings (residential and non-residential) and of civil engineering (roads, railways, bridges, tunnels, utility projects).

PLS help, 25 pts and brainliest will be given !
How can reflecting on morals and ethics; help you identify your areas of strengths and weaknesses?

Answers

Explanation:

Identifying your strengths and weaknesses can be extremely valuable. Not only will it allow you to approach tasks and challenges with a better understanding of how to succeed and what pitfalls to look out for, but it also allows you to effectively communicate what you can contribute, which is essential for things like job interviews.

Distinguishing your qualities and shortcomings can be very significant. Not exclusively will it permit you to move toward assignments and difficulties with a superior comprehension of how to succeed and what traps to pay special mind to, yet it likewise permits you to viably convey what you can contribute, which is fundamental for things like new employee screenings.

economics! please HELP
What do you think Adam Smith would think of the capitalist societies today? (regarding his "invisible hand" philosophy)

Answers

Answer:

The invisible hand is a term coined by Adam Smith, through which he stated his belief that an individual who acts for the benefit of himself also indirectly acts for the benefit of society or the collective, given that through the obtaining of benefits on the individual face greater wealth would be generated, transferring these benefits to the whole of society. Thus, I consider that if Adam Smith saw the current capitalist governments and the public participation of these in social assistance systems, he would not consider such actions as correct.

I need a name for an app that could help the community. It has to be original though none that already exists

Answers

Answer:

green help

Explanation:

lol

Answer:

GreenEarth

Green flower

Explanation:

Match each given scenario to its cause.

Answers

Answer:

1 goes to 2 and last one goes to 4 and 3 one goes to 3 and 1 ones goes to 4th

Explanation:

A company has stock which costs $41.50 per share and pays a dividend of $2.50 per share this year. The company's cost of equity is 7%. What is the expected annual growth rate of the company's dividends

Answers

Answer:

90

you welcome

Raoul receives a postcard from a car dealership reminding him of the substantial discounts and extras he can receive if he buys a car this month. This ad addresses which stage in the adoption process

Answers

Answer:

Explanation:

Jsksnakanak

what are the causes of xenophobia​

Answers

Answer:

Hope it's help you and Mark me as brainliest.

Xenophobia is the fear of outsiders or strangers. The term is most commonly applied to people who are afraid of immigrants or people from unfamiliar, foreign cultures.

WHAT CAUSES XENOPHOBIA?

When xenophobia manifests as a true phobia, it comes in two distinct forms:

Cultural xenophobia occurs when a person fears a foreign culture.Stranger or immigrant xenophobia occurs when someone is frightened of people or groups perceived to be outsiders.

Apply Concepts Describe a hypothetical government budget that employs an expansionary policy.

Answers

Answer:

There will be cut in taxes and increased spending.

Explanation:

Expansionary policies are those in which government takes decisions to increase the spending on infrastructure, health, education and other development projects and reduces the taxes. This strategy is used to boost the economy. The increased spending creates more opportunities and there will be lesser unemployment in the country.

The expected return on Share Z is 17.50% with a beta of 1.90. If the risk-free rate is 8%, then what is the expected return on the market

Answers

Answer:

13%

Explanation:

Expected return on market = ((Expected return - Risk-free rate) / Beta) + Risk-free rate

Expected return on market = ((17.50% - 8%) / 1.90) + 8%

Expected return on market = 9.5%/1.90 + 8%

Expected return on market = 0.05 + 0.08

Expected return on market = 0.13

Expected return on market = 13%

Ginny, a licensee, uses a preprinted contract in Tim's purchase of a new loft apartment. There is a discrepancy in the contract between a preprinted clause and a handwritten addition. Which clause supersedes

Answers

Answer:

The handwritten clause generally supersedes the preprinted clause.

Explanation:

WORKERS OR FAMILY MEMBERS?
Paternalistic leaders have authority over their employees but view them as

Answers

The Answer is gonna be Workers

This is the Answer for your question :3

I hope you are having a great day ❤️❤️❤️

The Answer is: worker

Carla needs to examine the structure of the tables in her database. Where will she find the Table Analyzer Wizard in
Access 2016 to achieve this goal?
O Home
Create
O Database Tools
O File
Save and Exit
Nexi
Mark this and return

Answers

Answer:

database tools

Explanation:

Answer:

C) Database Tools

Explanation:

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