Please use Excel spreadsheet for complete info 1. Grand Adventure Properties offers a 8 percent coupon bond with annual payments. The yield to maturity is 6.85 percent and the maturity date is 8 years from today. What is the market price of this b 2023 Business & Finance
2023 Please use Excel spreadsheet for complete info 1 Grand Adventure Properties offers a 8 percent
| Please use Excel spreadsheet for complete info | ||||||||||||||||||||||||||||||||||||||||||||
| 1. Grand Adventure Properties offers a 8 percent coupon bond with annual payments. The yield to maturity is 6.85 percent and the maturity date is 8 years from today. What is the market price of this bond if the face value is $1,000? | ||||||||||||||||||||||||||||||||||||||||||||
| $951.69 | ||||||||||||||||||||||||||||||||||||||||||||
| $1,069.07 | ||||||||||||||||||||||||||||||||||||||||||||
| $1,077.18 | ||||||||||||||||||||||||||||||||||||||||||||
| $877.51 | ||||||||||||||||||||||||||||||||||||||||||||
| $1,020.76 | ||||||||||||||||||||||||||||||||||||||||||||
| 3. A Japanese company has a bond outstanding that sells for 89 percent of its ¥100,000 par value. The bond has a coupon rate of 4.8 percent paid annually and matures in 19 years. | ||||||||||||||||||||||||||||||||||||||||||||
| What is the yield to maturity of this bond? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) | ||||||||||||||||||||||||||||||||||||||||||||
| 10. Central Systems, Inc. desires a weighted average cost of capital of 9 percent. The firm has an after-tax cost of debt of 6 percent and a cost of equity of 12 percent. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital? | ||||||||||||||||||||||||||||||||||||||||||||
| 1 | ||||||||||||||||||||||||||||||||||||||||||||
| 1.17 | ||||||||||||||||||||||||||||||||||||||||||||
| 0.9 | ||||||||||||||||||||||||||||||||||||||||||||
| 1.1 | ||||||||||||||||||||||||||||||||||||||||||||
| 0.83 | ||||||||||||||||||||||||||||||||||||||||||||
| 11. Miller Manufacturing has a target debt–equity ratio of .50. Its cost of equity is 15 percent, and its cost of debt is 6 percent. If the tax rate is 34 percent, what is the company’s WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) | ||||||||||||||||||||||||||||||||||||||||||||
| 12. Filer Manufacturing has 5 million shares of common stock outstanding. The current share price is $84, and the book value per share is $7. The company also has two bond issues outstanding. The first bond issue has a face value $60 million, a coupon of 7 percent, and sells for 94 percent of par. The second issue has a face value of $35 million, a coupon of 8 percent, and sells for 107 percent of par. The first issue matures in 22 years, the second in 4 years. | ||||||||||||||||||||||||||||||||||||||||||||
| 13. Titan Mining Corporation has 9.7 million shares of common stock outstanding and 410,000 –4 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $45 per share and has a beta of 1.35, and the bonds have 10 years to maturity and sell for 116 percent of par. The market risk premium is 8.5 percent, T-bills are yielding 5 percent, and the company’s tax rate is 35 percent. | ||||||||||||||||||||||||||||||||||||||||||||
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