Your firm has a bond issue with a face value of $500,000 outstanding. These bonds have a coupon rate of 6 percent, pay interest semiannually, and have a current market price equal to 95 percent of face value. What is the amount of the annual tax shield on debt given a tax rate of 21 percen

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Q: Tony Ring wants to attend Northeast College. If he deposits $52,087 today, how much will he have 5…

A: Information Provided: Present value = $52,087 Interest rate = 6% compounded semiannually Period = 5…

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A: Simple interest is very simple and there is no compounding of interest and there is no interest on…

Q: + nt card has a balance of $5400 and an annual interest rate of 1 there are no further purchases…

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Q: A bond has a Current Yield of 10%.  If the bond is paying a coupon Rate of 7%, for how much is the…

A: A Bond refers to a concept that is defined as an instrument that represents the loan being made by…

Q: Your company currently has $1,000 par, 5.75% coupon bonds with 10 years to maturity and a price of…

A: Fv = face value  Rv = redemption value  n = life of bond The interest payment = 1000  * 5.75% *6/12…

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Q: What is the present value of the annuity that is payable quarterly for 4 years at 10% compounded…

A: PV of an ordinary annuity can be determined with the formula below: PV = PMT1 - (1+r)-nrWhere PMT =…

Q: If Php10,568 is the proceeds obtained after Php13,500 is discounted for 10 months, what is the…

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Q: On the birth of a child, a father wished to invest in a trust fund which gives 12% compounded…

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Q: ABC Corporation plans to issue a 9%, 10-year, P5,000,000 face value bonds. It will incur P500,000 as…

A: Yield to maturity is rate of return realized on the bond when bond is held till the maturity period…

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A: IRR is internal rate of return is at which net present value is zero and if IRR is benchmark return…

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A: a) Expected Rate of return is determined as the sum of the probability* returns. Result: Answer:…

Q: You run a nail salon. Fixed monthly cost is $5,419.00 for rent and utilities, $5,913.00 is spent in…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Required: a. Calculate the standard deviation of returns of each service provider. b. Which service…

A: In finance we use standard deviation as a measure of risk. Now standard deviation of returns is a…

Q: If you saved your tax refund $14,089.39, quit buying vendor coffee for one year $12,522.23, and…

A: Information Provided: Tax refund = $14,089.39 Coffee savings = $12,522.23 Contribution = $5040…

Q: Dantzler Corporation is a fast-growing supplier of office products. Analysts project the following…

A: a) Continuing or Horizon value is the value of all cash flows 1 year from now and beyond in…

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Q: Suppose the real rate is 2.9 percent and the inflation rate is 4.5 percent. What rate would you…

A: Real rate = 2.9% Inflation rate = 4.5%

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A: Systematic risk-This type of risk is undiversifiable risk because systematic risk is inherent to the…

Q: (i) Mimie borrowed $8500 from her parents to buy a ride-on mower so she could start her mowing…

A: Amount borrowed (P) = $8500 Interest rate (r) = 0.025 Period (t) = 5.5 Years Total interest paid = ?…

Q: Mr Ridge range for a mortgage loan for 65% of the 2.5 million purchase price of a home. The monthly…

A: Loan amount = 65% of purchase price of a home = 0.65×2500000 = 1,625,000 Number of monthly payment…

Q: Tom Inc. bonds mature in 8 years, have a par value of $1,000, and make an annual coupon interest…

A: Par value  (FV) = $1000 Annual coupon amount (C) = 65/2 = $32.50 Years to maturity = 8 Years Number…

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Q: Perkins, Inc., is considering an investment of $379,000 in an asset with an economic life of 5…

A:

Q: Question 8 How much is the proceeds if Mark borrows Php22,735 at 2.85% for 2 years and 5 months? 8…

A: Borrowed amount (PV) = Php 22,735 Interest rate (r) = 2.85% Period (n) = 2.416666666667 Years

Q: Suppose rRF = 4%, rM = 11%, and bi = 1.6. A. What is ri, the required rate of return on Stock i?…

A: Given,

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Q: You are called in as a financial analyst to appraise the bonds of Olsen's Clothing Stores. The…

A: To Find: Price of the bond

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Q: Premier, Incorporated, has an odd dividend policy. The company has just paid a dividend of $5 per…

A: Just paid dividend = $5 Year 1 Dividend = $9 (i.e. $5 + $4) Year 2 Dividend = $13 (i.e. $9 + $4)…

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A: The Black-Scholes Model is a model that was developed for the pricing of European options based on…

Q: Which is riskier lower IRR or a higher IRR? Please explain and incorporate differences in risk based…

A: According to the internal rate of return (IRR) rule, a project or investment should be undertaken if…

Q: A company is considering an investment with the Bollars. The general inflation rate (7) during this…

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Q: 2. Assuming the following: Average Return (Risky Portfolio) 3.86% Standard Dev (Risky Portfolio)…

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Q: Ms. Brown purchases a house for $300,000. She borrows $200,000 from a mortgage company at the rate…

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Q: Discount rate Year Costs Benefits Cashflow Discount factor Present Net Value (NPV) Discounted costs…

A: Discount Rate 8% Year 0 1 2 Cost                                               140,000.00…

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Q: Pirates Inc. just paid a $2.00 dividend. Their expected dividends are $1.75 in year 1, $1.50 in year…

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Q: As the Head of Investment for your company you are expected to compute the 10% value-at-risk for…

A: We have a portfolio of two asset classes. We have to find the expected return, standard deviation…

Q: Find the future value of the following ordinary annuity. periodic payment $95 payment interval 1…

A: Periodic payment (C) = $95 Term (n) = 5 Years Interest rate = 0.11 or 11% Future value = ?   Future…

Q: Sam Long anticipates he will need approximately $225,800 in 11 years to cover his 3-year-old…

A: Future value is a concept of time value of moeny and is used to determine the worth of a lumpsum…

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Q: An investment will pay you $45,000 in 12 years. If the appropriate discount rate is 7.2 percent…

A: Present Value A method that helps estimate the current value of money in the future is called…

Q: Stephanie Carter has been gifted a sum of $50,000 by her grandparents on completing her graduation…

A: Future Value: The value of an investment at the end of its invested period or at some point of time…

Q: Assume the following. In 2008, the U.S. had real GDP of $16.6 trillion and the CPI was at 90.72. At…

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A: We have all the details pertaining to a bond. We have to find its dollar price using excel.

Q: Isn't the final payment going to be $144.78? How did you get final payment of $138.51

A: Table showing the final payment: Snapshot: