Question
Debt to total assets 42% Bond price $920 Times interest earned 5.5X Annual interest 9.45% Fixed charge coverage 4.2X Maturity 20 years Current ratio 2.3X
| Debt to total assets | 42% |
| Bond price | $920 |
| Times interest earned | 5.5X |
| Annual interest | 9.45% |
| Fixed charge coverage | 4.2X |
| Maturity | 20 years |
| Current ratio | 2.3X |
| Par value | $1,000 |
| Return on stockholders equity | 17.1% |
| (principal payment) |
|
Assume the zero-coupon rate bonds would be issued at 11 percent for 20 years, what will be the initial price of a $1,000 bond? Use Appendix B to find the present value (price of the bond). How many bonds must be issued to raise $20 million? What is the danger in issuing the zero-coupon rate bonds?
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Port Infrastructure Finance
Authors: Hilde Meersman, Eddy Van De Voorde, Thierry Vanelslander
1st Edition
0415720060, 978-0415720069
