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I need help filling in the fields for Part1-Q2. Part 1: Read the following information East Coast Yachts was founded 10 years ago by Larissa
I need help filling in the fields for Part1-Q2.
Part 1: Read the following information East Coast Yachts was founded 10 years ago by Larissa Warren. The company's operations are located near Hilton Head Island, South Carolina. The company has manufactured custom midsize, high- performance yachts for clients over this period, and its products have received high reviews for safety and reliability. The company's yachts have also recently received the highest award for customer satisfaction. The yachts are primarily purchased by wealthy individuals for pleasure use. Dan Ervin was recently hired by East Coast Yachts to assist the company with its short-term financial planning After Dan's EFN (External Finance Needed) analysis for East Coast Yachts, Larissa (the founder of East Coast Yachts) has decided to expand the company's operations. She has asked Dan to enlist an underwriter to help sell $75 million in new 25-year bonds to finance new construction. Dan has entered into discussions with Kim McKenzie, an underwriter from the firm of Crowe & Mallard, about which bond features East Coast Yachts should consider and also what coupon rate the issue will likely have. Although Dan is aware of bond features, he is uncertain as to the costs and benefits of some of them, so he isn't clear on how each feature would affect the coupon rate of the bond issue. Please use the following information to complete the Part1 - 01: You are Kim's assistant, and she has asked you to prepare a memo to Dan describing the effect of each of the bond features on the coupon rate of the bond. Complete the tasks provided in the Partl-Q1 instruction below this box. Please use the following information to complete the Part1 - 02: Dan is also considering whether to issue coupon bearing bonds or zero-coupon bonds. The YTM on either bond issue will be an 8 percent. The coupon bond would have an 8 percent coupon rate, and the coupon will be paid semi-annually. The company's tax rate is 35 percent. Either bond has the par value of $1,000. Complete the tasks provided in the Part1-Q2 instruction below this box. $75,000,000.00 8.00% 8.00% Capital to be raised: Number of years to maturity: Coupon bond: YTM: Annual coupon rate: Coupon per year: Par value (or Face value): Zero coupon bond: YTM: Annual coupon rate: Face (Par) value: Tax rate: $1,000.00 8.00% 0.00% $1,000.00 35.00% Q2-a 25 How many coupon bonds must be issued? Settlement date: 1/1/2019 Maturity date: .......... 1/1/2039 Number of years to maturity: Annual coupon rate: Annual coupon PMT: YTM: Face value in $ Face value (as % of par) Coupons per year: Bond price in $ Bond price % of par). How many bonds?: How many zero coupon bonds must be issued? Settlement date: 1/1/2019 Maturity date: 1/1/2039 Number of years to maturity: ......25 Annual coupon rate: .......... . Annual coupon PMT: YTM: Face value in $ Face value (as % of par) Coupons per year: Bond price in $ Bond price (% of par) How many bondsStep by Step Solution
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