Cote Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the followingtable.Bond1234Coupon Rate6.00 %7.507.206.80Price Quote103.26110.58109.93102.83Maturity5 years8 years15.5 years25 yearsFace Value$ 45,000,00040,000,00050,000,00065,000,000If the corporate tax rate is 34%, what is the after-tax cost of the company's debt? (Do not round intermediate calculations. Round thefinal answer to 2 decimal places.)Cost of debt

The market values are used for finding the total cost of company debt in the given case. The YTM…

Answered: Cote Import has several bond issues…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...

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Calculate the value of each bond and discuss whether it sells at par, discount, or premium. (Annual interest rate) O A. Bond Bond Value A B C O B. Bond A B C O C. Bond A B с O D. Bond A B C $1,149.39 Discount $1,000.00 Par $85.60 Premium Bond Value Sells at par/discount/premium Bond Value $1,149.39 Premium $1,000.00 Par $85.60 Discount Sells at par/discount/premium Bond Value Sells at par/discount/premium $1,149.39 Premium $1,000.00 Par $85.60 Premium Sells at par/discount/premium $1,049.39 Premium $1,100.00 Premium $85.60 Discount Bond Par value Coupon interest Years to rate maturity JA B IC $1000 14% $1000 18% $100 10% 120 16 18 Required return 12% 8% 13%
The Excel file Immunization Using Individual Bonds contains information about three bonds. Use this data to: Yield to maturity (Expected/Current) 7% Number of Years to Future Liability 8 Future Liability $ 3,000.00 Bond 1 Bond 2 Bond 3 Coupon rate 8.00% 9.000% 7.00% Maturity 9 24 15 Face value 1,000 1,000 1,000 Explain which bond you prefer to use to attempt to immunize this obligation which is due in 8 years. Analyze each bond’s performance in attempting to achieve immunization Please show work in excel and functions/equations used.
Assume bonds payable are amortized using the straight-line amortization method unless stated otherwise. Pricing bonds Bond prices depend on the market rate of interest, stated rate of interest and time. Requirements Compute the price of the following 8% bonds of Country Telecom. a. $100,000 issued at 75.25 $100,000 issued at 94.50 b. $100,000 issued at 103 50 c. $100,000 issued at 94.50 d. $100,000 issued at 103.25 2. Which bond will Country Telecom have to pay the most to retire at maturity? Explain your answer.
Assume bonds payable are amortized using the straight-line amortization method unless stated otherwise. Pricing bonds Bond prices depend on the market rate of interest, stated rate of interest and time. Requirements Compute the price of the following 8% bonds of Country Telecom. $100,000 issued at 75.25 $100,000 issued at 94.50 $100,000 issued at 103 50 $100,000 issued at 94.50 $100,000 issued at 103.25 2. Which bond will Country Telecom have to pay the most to retire at maturity? Explain your answer.
A bond traded at 971⁄2 means that a. The bond pays 971⁄2% interest. b. The bond trades at $975 per $1,000 bond. c. The market rate of interest is below the contract rate of interest for the bond. d. The bonds can be retired at $975 each. e. The bond’s interest rate is 21⁄2%.
Bond prices depend on the market rate of interest, stated rate of interest, and time. Read the requirements. Requirement 1. Compute the price of the following 5% bonds of Country Telecom. a. The price of the $500,000 bond issued at 75.75 is Requirements 1. 2. Compute the price of the following 5% bonds of Country Telecom. a. $500,000 issued at 75.75 b. $500,000 issued at 103.50 c. $500,000 issued at 95.75 d. $500,000 issued at 102.50 Which bond will Country Telecom have to pay the most to retire at maturity? Explain your answer. Print Done - X
Consider the following figure which shows the relationship between a three-year bond's price (vertical axis) and the passage of time (measured in years - horizontal axis). $106.000 $104.000 $102.000 $100.000 $98.000 $96.000 $94.000 594.846 0.00 S96.688 598.567 0.50 Bond Price as Time Passes $100.4 1 $102.433 $96.433 1.00 $98.307 $100.217 1.50 $102.13 58148 2.00 Which of the following statements are consistent with the figure above? $104.148 $100.055 $106.000 $101.99 250 $103.980 This pattern of prices is consistent with a bond whose yield to maturity is below the band's coupon rate. This bond pays a coupon of $8. This bond pays coupons on an annual basis. None of the other statements are correct. 100
S14-4 Pricing bonds Bond prices depend on the market rate of interest, stated rate of interest and time. Requirements 1. Compute the price of the following 8% bonds of Country Telecom. a. $100,000 issued at 75.25 c. $100,000 issued at 94.50 b. $100,000 issued at 103.50 d. $100,000 issued at 103.25 2. Which bond will Country Telecom have to pay the most to retire at maturity: Explain your answer.
Bond A is a 15-year, 10.50% semiannual-pay bond priced with a yield to maturity of 8.00%, while Bond B is a 15-year, 7.35% semiannual-pay bond priced with the same yield to maturity. Given that both bonds have par values of $1,000, the prices of these two bonds would be: Bond A Bond B A. $1,216.15 $944.67 B. $1,216.15 $913.54 C. $746.61 $913.54
Bond prices depend on the market rate of interest, stated rate and time Compute the price of the following 5% bonds of Teledyne Inc. a. $900,000 issued at 92 b. $500,000 issued at 104.5 c. $500,000 issued at 95.5 d. $200,000 issued at 100 e. $600,000 issued at 102 3/4
A bond with a face amount of $12,000 has a current price quote of 107.15. What is thebond’s price?a. $12,107.15b. $1,285.80c. $12,858.00d. $128,580
If bonds are issued at 101.25, this means thata. a $1,000 bond sold for $1,012.50.b. a $1,000 band sold for $101.25.c. the bonds sold at a discount.d. The bond rate of interest is 10.125% of the market rate of interest.

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