What is the relationship between a bond's price and its yield to maturity?

What is the relationship between a bond's price and its yield to maturity?

Click here for the solution: What is the relationship between a bond's price and its yield to maturity?

A company has a debt with a yield to maturity of 6.3%, a cost of equity of 14.5%, and a cost of preferred stock of 9.2%

A company has a debt with a yield to maturity of 6.3%, a cost of equity of 14.5%, and a cost of preferred stock of 9.2%. The market values of its debt, preferred stock and equity are $15.2 million, $2.9 million, and $20.6 million, respectively, and its tax rate is 35%.

What is the firm’s weighted average cost of capital (WACC)?


Click here for the solution: A company has a debt with a yield to maturity of 6.3%, a cost of equity of 14.5%, and a cost of preferred stock of 9.2%

On January 1 of the current year, Feller Corporation issued $2,500,000 of 10% debenture bonds on a basis to yield 9%, receiving $2,612,150

On January 1 of the current year, Feller Corporation issued $2,500,000 of 10% debenture bonds on a basis to yield 9%, receiving $2,612,150. Interest is payable annually on December 31 and the bonds mature in 6 years. The effective-interest method is used.

(a) What is the interest expense for the first year?
(b) What is the interest expense for the second year?


Click here for the solution: On January 1 of the current year, Feller Corporation issued $2,500,000 of 10% debenture bonds on a basis to yield 9%, receiving $2,612,150