Multiple choice. Please show work. Several years ago the Chorizo de Pamplona Lim
ID: 2765897 • Letter: M
Question
Multiple choice. Please show work. Several years ago the Chorizo de Pamplona Limitada sold a dollar1.000 par value, noncallable bond that now has 20 years, to maturity and a 7.00% annual coupon that is paid semiannually. The bond currently sells for dollar9.50. and the company's tax rate is 40% What is the component cost of debt for use in the WACC calculation? 4.81% 4.49% 4.31% 5.48% 5.30% You were hired as a consultant to Chuletas de Cordero y Campania, whose target capital structure is 35% debt. 10% preferred, and 55% common equity. The interest rate on new debt is 6.50%. the yield on the preferred is 6.00%, the cost of retained earnings is 13,25%, and the tax rate is 40%. The firm will not be issuing any new stock. What is Chuletas de Cordero's WACC? 11.20% 9.99% 9.16% 9.25% 9.44% Which of the following statements is CORRECT? If n coupon bond, is selling at par, its current yield equals its yield to maturity. If a coupon bond is selling at a discount, its price will continue to decline until it reaches its par value at maturity. If interest rates increases,the price of a 10-year coupon bond will decline by a greater percentage than the price of a 10-year zero coupon bond. If a bond's yield to maturity exceeds its annual coupon, then the bond will trade at a premium. If a coupon bond is filing at a premium, its current yield equals its yield to maturity. La Empresa Cochimillo Asado recently issued noncallable bonds that mature in 15 years, They have a par value of dollar1,000 and an annual coupon of 5.7% If the current market interest rate is 6 8%. are what price should the bonds sell? dollar844.62 dollar979.40 dollar736. 8O dollar1,006.36 dollar898.53 Which of the following is most likely to occur as you add randomly selected stock to your portfolio, which currently consists of 3 average stocks? The diversifiable risk of your portfolio will likely decline, but the expected market risk should not change. The expected return of your portfolio is likely to decline. The diversifiable risk will remain the same, but the market risk will likely decline. Both the diversifiable risk and the market risk of your portfolio are likely to decline. The total risk of your portfolio should decline, and as a result, the expected rate of return on the portfolio should also decline.Explanation / Answer
1000 $ 1,000.00 7 7% 20 20 2 2 950 $ 950.00 YTM 7.49% RATE(B4*B5,B3/B5*B2,-B6,B2)*B5 Tax 40% 2.99% 4.49% After Tax debt 35 6.50% Tax 40% 0.039 1.37 PS 10 0.06 0.60 ES 55 0.1325 7.29 9.25%
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.