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Can you please help with these 4 questions? Cote Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in
Can you please help with these 4 questions?
Cote Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. Bond 1 2 Coupon Rate 7.00 % 8.50 8.20 7.80 Price Quote 103.54 110.86 110.21 103.11 Maturity 5 years 8 years 15.5 years 25 years Face Value $ 45,000,000 40,000,000 50,000,000 65,000,000 3 4 If the corporate tax rate is 34%, what is the after-tax cost of the company's debt? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Cost of debt % Pearce's Cricket Farm issued a 30-year, 8% semiannual bond 5 years ago. The bond currently sells for 93% of its face value. The company's tax rate is 25%. Assume the par value of the bond is $1,000. a. What is the pre-tax cost of debt? (Do not round intermediate calculations. Round the final answer to 3 decimal places.) Pre-tax cost of debt b. What is the after-tax cost of debt? (Do not round intermediate calculations. Round the final answer to 3 decimal places.) After-tax cost of debt % c. Which is more relevant, the pre-tax or the after-tax cost of debt? After-tax cost of debt O Pre-tax cost of debt Cornwell Industries stock has a beta of 1.10. The company just paid a dividend of $1.44, and the dividends are expected to grow at 4%. The expected return on the market is 10%, and Treasury bills are yielding 3.2%. The most recent stock price for the company is $72. a. Calculate the cost of equity using the dividend growth model method. (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Dividend growth model method 1% b. Calculate the cost of equity using the SML method. (Do not round intermediate calculations. Round the final answer to 3 decimal places.) SML method % Welling Inc. has a target debt-equity ratio of 0.82. Its WACC is 9.8%, and the tax rate is 35%. a. If the company's cost of equity is 14%, what is its pre-tax cost of debt? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Cost of debt 1% b. If instead you know that the after-tax cost of debt is 6.8%, what is the cost of equity? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Cost of equity %Step by Step Solution
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