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- Gingko Inc. issued bonds with a face value of $100,000, a rate of 7%, and a 10-yearterm for $103,000. From this information, we know that the market rate of interest was ________. A. more than 7% B. less than 7% C. equal to 7% D. equal to 1.3%Michalleti Marketing Consulting Ltd issued Gh¢500million of zero-coupon bonds with ex-interest of Gh¢120, due for repayment in 5years time at par. Its current market price is Gh¢105. What is the company’s cost of debt capital? plZ help me sir urgentlyPacific Filght PLC has in issue K500,000 10% irredeemable debentures. Investors currently require 8% return per annum. What will be the market value of the debt?
- On January 1, 2018, Brandon Electronics issued $85 million of 11.5% bonds, dated January 1. The market yieldfor bonds of maturity issued by similar firms in terms of riskiness is 12.25%. How can Brandon sell debt payingonly 11.5% in a 12.25% market?Assume Lyda Inc. sold bonds with a face value of P500,000 for P530,000. Was the market interest rate equal to or greater than the bonds’ contractual interest rate? What are the financial ratios used to analyze current liabilities and long-term liabilities?On January 1, 2021, Brandon Electronics issued $85 million of 11.5% bonds, dated January 1. The market yield for bonds of maturity issued by similar firms in terms of riskiness is 12.25%. How can Brandon sell debt paying only 11.5% in a 12.25% market?
- Ashes Divide Corporation has bonds on the market with 14.5 years to maturity, a YTM of 6.8 percent, and a current price of GH¢924. The bonds make semiannual payments. What must the coupon rate be on these bonds?Doha plc has some surplus funds that it wishes to invest in bonds. The company requires a return of 15% on bonds, and the finance director has asked you to analyse whether it should invest in either of the following bonds that are available:Company A: Expected profit 12% bonds, redeemable at par at the end of two more years, with a current market value of QAR 95 per QAR 100 bondCompany B: Expected profit 8% bonds, redeemable at QAR110 at the end of two more years, with a current market value of QAR 95 per QAR 100 bonda. Calculate the expected value (price) of the two bonds and evaluate if either offer an appropriate return for Doha Plc.b. Critically evaluate what would be the impact on the price of bonds if Doha Plc reduces their required return.c. Critically evaluate and discuss the factors that should be considered by the directors of a company when choosing whether to use debt or equity finance for a new projectd. Recently one director has attended a finance conference, on their…CG Forest and Paper LTD. raises capital; by selling 5,000,000 worth of debt with flotation xost equal to 3% of its par value. If the debt matures in 15 years and has coupon rate of 6% (paid annually).What is the bond's YTMSubject: Financial Accounting
- FIXY has assets of $2 million invested in a 25-year, 6 percent annual coupon Treasury bond selling at par. The assets are financed with equity and a $ 1700000, 4-year, 3 percent annual coupon capital note selling at par. What is the leverage adjusted duration gap of FIXY? What is the impact on equity value if the relative change in all market interest rates is AR/(1+R /2)=0.003?To help finance a major expansion, GAMA Company sold a bond with 20 years to maturity. This bond has a 9.25% annual coupon, paid semiannually, sells at a price of $1,075, and has a par value of $1,000. What is the component cost of debt for use in the WACC calculation? Show work in excel and explain answerAC will be issuing bonds with a total face value of P10,000,000 at an issue price of P9,900,000. It will incur issuance cost of P600,000. The bonds have a term of 10 years and a coupon rate of 12% payable quarterly. If the tax rate is 30%, what is the effective cost of the bonds using the interpolation method? Use increments of 1%.
