Question

PLEASE SOLVE USING EXCEL AND SHOW FORMULAS

Gronseth Drywall Systems, Inc., is in discussions with its investment bankers regarding the issuance of new bonds. The investment banker has informed the firm that different maturities will carry different coupon rates and sell at different prices. The firm must choose among several alternatives. In each case, the bonds will have a $1000 par value and flotation costs will be $40 per bond. The company is taxed at 25%. Use the approximation formula to calculate the after-tax cost of financing with the following alternative.

Coupon Rate: 8%

Time to Maturity 17 Years

Premium or Discount: 290

The after-tax cost of financing using the approximation formula is

(round answer to two decimal places

Answer #1

Please show all calculations and formulas. If using Excel (or
tables), please show data, formulas, etc.
Practice question 14:
Calculate the company’s w.a.c.c. using the info
below.
***assume this is a corporate bond that pays 2x annually when
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Please show formulas and calculations and not just
results and numbers, and explain rationale for
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Equity Lighting Corporation wishes to explore the effect on its
cost of capital of the rate at which the company pays taxes. The
firm wishes to maintain a capital structure of 30% debt, 10%
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A firm that is in the 35% tax bracket forecasts that it can
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following proportions:
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face value), have 4 years remaining, have an annual coupon of 7%,
and their investment bank thinks that new bonds will have a 40
basis point (0.40%)...

I will be happy if you use excel and show me the
calculation process. Please complete in your own style. If u get
any info missing or any sequence problem for the question then
adjust it or take assumption for it. I hope all info there but
still if i miss then do it in your own style. Thanks
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taxed at a rate of 27%.
a. If the market price of the common stock is $40 and dividends
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Edna Recording Studios, Inc., reported earnings available to
common stock of
$4 comma 400 comma 0004,400,000
last year. From those earnings, the company paid a dividend
of
$1.251.25
on each of its
1 comma 000 comma 0001,000,000
common shares outstanding. The capital structure of the company
includes
2525%
debt,
2020%
preferred stock, and
5555%
common stock. It is taxed at a rate of
2424%.
a. If the market price of the common stock is
$4545
and dividends are expected to...

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Brook’s Window Shields Inc. is trying to calculate its cost of
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The company currently has outstanding a bond with a 10.2 percent
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