Bond Assignment
Excey Corp. has 9 percent coupon bonds making annual payments with a YTM of 8.2 percent. The current yield on these bonds is 8.55 percent.
How many years do these bonds have left until they mature? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Maturity of bond years
Starset, Inc., has a target debt-equity ratio of .95. Its WACC is 7.9 percent, and the tax rate is 25 percent.
a. If the company’s cost of equity is 12 percent, what is its pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b. If instead you know that the aftertax cost of debt is 6.4 percent, what is the cost of uity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
a. Cost of debt
b. Cost of equity
Jallouk Corporation has two different bonds currently outstanding. Bond M has a face value of $20,000 and matures in 20 years. The bond makes no payments for the first six years, then pays $1,300 every six months over the subsequent eight years, and finally pays $1,600 every six months over the last six years. Bond N also has a face value of $20,000 and a maturity of 20 years; it makes no coupon payments over the life of the bond. The required return on both these bonds is 8 percent compounded semiannually.
What is the current price of Bond M and Bond N? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Current price Bond M Bond N. Get Finance homework help today
