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You have been hired to analyze the debt securities of your organization. The firm has outstanding loans and bonds. A quick review of the balance
You have been hired to analyze the debt securities of your organization. The firm has outstanding loans and bonds. A quick review of the balance sheet shows the following: Nominal Interest Liability Coupon Years to Amount (S) Maturity Rate Selected Liabilities of the firm 800 Simple Loans 5,000 12% 19 Fixed-Payment Loans 10% 500,000 Long-term Bonds 1 1,080,000 10% 10 Long-term Bonds #2 1,585,800 Liabilities Total 930.50 Market Price for Bond #1 859.50 Market Price for Bond #2 1,000.00 Face Value of Each Bond Selected Current Assets of the firm Marketable Securities: Treasury Bills 100,000 Note: Treasury Bills have a S 10.000 face value, which matures in one year. Each Treasury Bill has a cost of $9,580.00
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