Their debt flotation costs are currently estimated to be 4, Ask an Expert

Academics

Q. Jan Volk, financial manager of Green Sea Transport (GST), has been asked by her boss to review GST's outstanding debt issues for possible bond refunding. Five years ago, GST issued $40,000,000 of 11%, 25 years debt. The issue, with semi-annual coupons, is currently callable at a premium of 11%, or $110 for each $1,000 par value bond. Flotation cost on this issue was 6%, or $2,400,000.

Volk believes that GST could issue 20 years debt today with a coupon rate of 8%. The firm has placed many issues in the capital markets during the last 10 years, and their debt flotation costs are currently estimated to be 4% of the issue's value. GST's federal-plus -tax rate is 40%. Illustrate what is the dollar floatation cost on the new issue?

View complete question

Physics, Academics

Category:- Physics
Reference No.:- M9402089

Have any Question?Write your Review or question?

Related Questions in Physics

Question a proton accelerates from rest in a uniform

Question: A proton accelerates from rest in a uniform electric field of 610 N/C. At some later time, its speed is 1.4 106 m/s. (a) Find the magnitude of the acceleration of the proton. m/s2 (b) How long does it take the ...

The ball was thrown from 190 m height building the initial

The ball was thrown from 19.0 m height building. The Initial velocity is 39.2 M/S and it creates 30 degree angel with the horizontal surface.. Find the Max height the ball can reach, range and velocity before it hits the ...

Problem suppose a point charge produces a potential of -18

Problem: Suppose a point charge produces a potential of -1.8 V at a distance of 1.1 mm. What is the charge, in coulumbs, of the point charge? The response must be typed, single spaced, must be in times new roman font (si ...

Question a picture frame hung against a wall is suspended

Question: A picture frame hung against a wall is suspended by two wires attached to its upper corners Part A: If the two wires make the same angle with the vertical, what must this angle be if the tension in each wire is ...

How are chemical and physical changes different what are

How are chemical and physical changes different. What are some demonstrations that you might do to help your students differentiate between a chemical and physical change?

A puck is moving on an air hockey table relative to an x y

A puck is moving on an air hockey table. Relative to an x, y coordinate system at time t = 0 s, the x components of the puck's initial velocity and acceleration are v0x = +7.8 m/s and ax = +5.3 m/s2. The y components of ...

Question a point charge with charge q1 is held stationary

Question: A point charge with charge q1 is held stationary at the origin. A second point charge with charge q2moves from the point (x1, 0) to the point (x2, y2). Please use k for Coulomb's constant rather than writing it ...

Suppose the convention were adopted that defines w and w 0

Suppose the convention were adopted that defines W and W 0 in the first law of thermodynamics to be the "work done on the system by the surroundings." a. Write the first law with this alternate convention. b. Why do the ...

Question a standard biological microscope is required to

Question: A standard biological microscope is required to have a magnification of 200Ã-. When paired with a 10Ã- eyepiece, what power objective is needed to get this magnification? Part A: Assume that the length of the t ...

Question to take off from the ground an airplane must reach

Question: To take off from the ground, an airplane must reach a sufficiently high speed. The velocity required for the takeoff, the takeoff velocity, depends on several factors, including the weight of the aircraft and t ...

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 Physics Expert