Qusetion cost of debt sincere stationery corporation needs, Ask an Expert

Finance

Qusetion: Cost of debt) Sincere Stationery Corporation needs to raise $516,000 to improve its manufacturing plant. It has decided to issue a $1,000 par value bond with an annual coupon rate of 11.4 percent with interest paid semiannually and a 10-year maturity. Investors require a rate of return of 8.1 percent.

a. Compute the market value of the bonds.

b. How many bonds will the firm have to issue to receive the needed funds?

c. What is the firm's after-tax cost of debt if the firm's tax rate is 34 percent?

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92800539

Have any Question?Write your Review or question?

Related Questions in Basic Finance

Oceangate sells external hard drives for 300 each its total

OceanGate sells external hard drives for $300 each. Its total fixed costs are $30 million, and its variable costs per unit are $240. The corporate tax rate is 30%. If the economy is strong, the firm will sell 2 million d ...

What is an integrated supply chain and how does it differ

What is an integrated supply chain and how does it differ from the traditional idea of a supply chain?

You plan to buy the house of your dreams in 12 years you

You plan to buy the house of your dreams in 12 years. You have estimated that the price of the house will be $78,423 at that time. You are able to make equal deposits every month at the end of the month into a savings ac ...

International finance please show all work whether in excel

International Finance. Please show all work whether in Excel or Word Assume that Calumet Co. will receive 10 million pesos in 15 months. It does not have a relationship with a bank at this time, and therefore cannot obt ...

Consider the following scenario analysisrate of

Consider the following scenario analysis: Rate of Return Scenario Probability Stocks Bonds Recession 0.20 -4% 16% Normal economy 0.50 18 9 Boom 0.30 29 6 a. Is it reasonable to assume that Treasury bonds will provid ...

A mining company wishes to start up a new small gold mine

A mining company wishes to start up a new small gold mine. The initial cost will be $5m and it is expected to extract $3m a year in gold with incurring only $1.5m a year in costs for 5 years. Assume revenue and costs are ...

What are the differences between a cash budget and an

What are the differences between a cash budget and an operating budget and Why might both be important to a small business?

Youre prepared to make monthly payments of 210 beginning at

You're prepared to make monthly payments of $210, beginning at the end of this month, into an account that pays 6.2 percent interest compounded monthly. How many payments will you have made when your account balance reac ...

What is the difference between risk and uncertainty and

What is the difference between risk and uncertainty and what are the methods of risk management?

As the sports exports company exports footballs to the

As the Sports Exports Company exports footballs to the United Kingdom, it receives British pounds. The check (denominated in pounds) for last month's exports just arrived. Jim Logan (owner of the Sports Exports Company) ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Basic Finance Expert