Solutions 12-2 & 8 - Coupon rate 7.50% Bond price...

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Chapter 12 Question 2 Input Area: Settlement 01/01/05 Maturity 01/01/17 Price (% of par) 105 Coupon rate 8% Payments per year 2 Tax rate 35% Output Area: Pretax cost 7.37% Aftertax cost of debt 4.79%
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Chapter 12 Question 8 Input Area: Shares outstanding 9,500,000 Market price per share $53 Book value per share $5 Bond I Book value $75,000,000 Coupon rate 8.00% Bond price (% of par) 93.0 Settlement date 01/01/05 Maturity date 01/01/15 Payments per year 2 Bond II Book value $60,000,000
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Unformatted text preview: Coupon rate 7.50% Bond price (% of par) 96.5 Settlement date 01/01/05 Maturity date 01/01/11 Payments per year 2 Output Area: a. BV(E) $47,500,000 BV(D) $135,000,000 V $182,500,000 E/V 0.2603 D/V 0.7397 b. MV(S) $503,500,000 MV(B) $127,650,000 V $631,150,000 S/V 0.7978 B/V 0.2022 The market value weights are more relevant because they represent a more current valuation of the debt and equity....
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Solutions 12-2 & 8 - Coupon rate 7.50% Bond price...

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