Mrs. Kate Sawyer establishes a company with $220,000 of cash. $190,000 of this cash amount is paid to a supplier for an equipment purchase. Then the company has a great opportunity to enter into a project, but it has limited cash to invest in that project. Therefore, it decides to issue bonds and shares to the investors in order to raise funds. On the bond side, the company issues a $30,000 of 3-year zero-coupon bonds. The market yield is 10%. On the share side, however, the company issues $50,000 of common stock (par value: $1 each) at a price of $2.4 .At the time of these transactions are completed, what would be the total assets of the company? A) $340,000 B) $355,080 C) $362,540 D) $370,000 E) Other (Please Specify)

Mrs. Kate Sawyer establishes a company with $220,000 of cash. $190,000 of this cash amount is paid to a supplier for an equipment purchase. Then the company has a great opportunity to enter into a project, but it has limited cash to invest in that project. Therefore, it decides to issue bonds and shares to the investors in order to raise funds. On the bond side, the company issues a $30,000 of 3-year zero-coupon bonds. The market yield is 10%. On the share side, however, the company issues $50,000 of common stock (par value: $1 each) at a price of $2.4 .At the time of these transactions are completed, what would be the total assets of the company? A) $340,000 B) $355,080 C) $362,540 D) $370,000 E) Other (Please Specify)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 27P

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