q5

Pantheon Capital, S.A. If Pantheon Capital, S.A. is raising funds via a medium-term euronote with the following characteristics, how much in dollars will Pantheon receive for each $1,000 note sold? Coupon rate: 8% payable semiannually on June 30 and December 31 Date of issuance: February 28, 2011 Maturity: December 31, 2013 Note: the present value of the cash flows is essentially the face value of the note and that any difference is due to intermediate rounding. CHO The value of a note is the total present value of all its future cash flows discounted at the firm's cost of capital. The value of the medium-term euronote can be calculated in the following table: (Round the cash flows to the nearest cent and the discount factor to four decimal palces.) Cumulative Days Cash Discount Discounted Days Since Previous Payment Date 122 from Start Flows Factor Cash Flows 122 $ 180 302 $ $ 180 482 $ $ Cash Payment (Payment Date) First Coupon (30 June 2011) Second Coupon (31 December 2011) Third Coupon (30 June 2012) Fourth Coupon (31 December 2012) Fifth Coupon (30 June 2013) Sixth and Final Coupon (31 December 2013) Principal Repayment (31 December 2013) Total Present Value 180 662 $ 180 842 $ $ 62 904 $ $ 62 904 $ $ $