Watters Umbrella Corp. issued 15-year bonds 2 years ago at a coupon rate of 8.2 percent. The bonds make semiannual payments. If these bonds currently sell for 85 percent of par value, what is the YTM?
Grand Adventure Properties offers a 7 percent coupon bond with annual payments. The yield to maturity is 5.85 percent and the maturity date is 7 years from today. What is the market price of this bond if the face value is $1,000?
Central Systems, Inc. desires a weighted average cost of capital of 9 percent. The firm has an after-tax cost of debt of 6 percent and a cost of equity of 11 percent. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital?
Filer Manufacturing has 8 million shares of common stock outstanding. The current share price is $74, and the book value per share is $5. The company also has two bond issues outstanding. The first bond issue has a face value $80 million, a coupon of 9 percent, and sells for 95 percent of par. The second issue has a face value of $60 million, a coupon of 10 percent, and sells for 108 percent of par. The first issue matures in 24 years, the second in 8 years.
•What are the company's capital structure weights on a book value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)
•Equity / Value
• Debt / Value
Titan Mining Corporation has 9.9 million shares of common stock outstanding and 430,000 6 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $47 per share and has a beta of 1.45, and the bonds have 20 years to maturity and sell for 118 percent of par. The market risk premium is 8.7 percent, T-bills are yielding 5 percent, and the company's tax rate is 40 percent.
• What is the firm's market value capital structure? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)
•weight
• Debt
• Equity