Proctor and Gamble's total amount of debt increased from 31.9% in March 2011 to 34.2% in December 2011, mainly due to its net debt issuances to fund general corporate purposes. What was the annual cost of the funds raised from the $1.0 billion bonds that mature in 2014 to P&G? If the bond sold at $100.10 at the time of issue, investors' required annual yield would be Looking at the comparable U.S. Treasury yield, these bonds were issued at a spread of Because the coupon rate is basis points. the yield required by the market, the bond sold at If the new observed yield of the bond is 1.2 % , the bond is likely to be trading at a price of $ places.) basis points. at the time of issue. (Note: Round your answer to two decimal As interest rates increase, the yield required by the market will increase, and the price of the bond is likely to increases to 1.2%, the bond's price by If the current yield is higher than the coupon rate, investors would want a higher return on their investment. If the coupon rate is less than the yield required by the market, the price of the bond is most likely to be the par value of the bond, and the bond will sell at %. (Note: Round your answer to two decimal places.) Thus, when the yield

Proctor and Gamble's total amount of debt increased from 31.9% in March 2011 to 34.2% in December 2011, mainly due to its net debt issuances to fund general corporate purposes. What was the annual cost of the funds raised from the $1.0 billion bonds that mature in 2014 to P&G? If the bond sold at $100.10 at the time of issue, investors' required annual yield would be Looking at the comparable U.S. Treasury yield, these bonds were issued at a spread of Because the coupon rate is basis points. the yield required by the market, the bond sold at If the new observed yield of the bond is 1.2 % , the bond is likely to be trading at a price of $ places.) basis points. at the time of issue. (Note: Round your answer to two decimal As interest rates increase, the yield required by the market will increase, and the price of the bond is likely to increases to 1.2%, the bond's price by If the current yield is higher than the coupon rate, investors would want a higher return on their investment. If the coupon rate is less than the yield required by the market, the price of the bond is most likely to be the par value of the bond, and the bond will sell at %. (Note: Round your answer to two decimal places.) Thus, when the yield

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter7: Financial Activities

Section: Chapter Questions

Problem 11QE

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