Answered: . What is the yield to maturity on Fox…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter12: The Cost Of Capital

Section: Chapter Questions

Problem 17P

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Related questions

Question

100%

1. What is the yield to maturity on Fox Inc.'s bonds if its after-tax cost of debt is 9% and its tax rate is 34%?

5.94%

26.47%

13.64%

2. The Nunal Corporation finds that it is necessary to determine its marginal cost of capital. Nunal’s current capital structure calls for 45% debt, 15% preferred stock and 40% common equity. The costs of the various sources of financing are as follows: debt, after-tax 5.6%; preferred stock, 9%; retained earnings, 12%; and new common stock, 13.2%. If the firm has P12 million retained earnings, and Nunal has an opportunity to invest in an attractive project that costs P45 million, what is the marginal cost of capital of Nunal Corporation?

9.95%

8.83%

8.91%

12.40%

3. The Spade Company’s bonds have 4 years remaining to maturity. Interest is paid annually; the bonds have a P1,000, face value; and the coupon interest rate is 9%. What is the estimated yield to maturity of the bonds at their current market price of P829?

13.10%

14.80%

8.20%

10.86%

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