CMS Corporation's balance sheet as of today is as follows: Long-term debt (bonds, at par) $10,000,000 Preferred stock 2,000,000 Common stock ($10 par) 10,000,000 Retained earnings 4,000,000 Total debt and equity $26,000,000 The bonds have a 5.5% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the firm's debt? Select the correct answer. a. $6,272,875 b. $6,271,677 c. $6,273,474 d. $6,272,276 e. $6,271,077

CMS Corporation's balance sheet as of today is as follows: Long-term debt (bonds, at par) $10,000,000 Preferred stock 2,000,000 Common stock ($10 par) 10,000,000 Retained earnings 4,000,000 Total debt and equity $26,000,000 The bonds have a 5.5% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the firm's debt? Select the correct answer. a. $6,272,875 b. $6,271,677 c. $6,273,474 d. $6,272,276 e. $6,271,077

Principles of Accounting Volume 1

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Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 3EB: Smashing Cantaloupes Inc. issued 5-year bonds with a par value of $35,000 and an 8% semiannual...

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CMS Corporation's balance sheet as of today is as follows: Long-term debt (bonds, at par) Preferred stock Common stock ($10 par) Retained earnings Total debt and equity $10,000,000 2.000.000 10,000,000 4.000.000 $26.000,000 The bonds have a 6.6% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the firm's debt? Select the correct answer. Oa. $6,900,480 Ob.$6,901,361 Oc$6,899,600 d. $6,903,121 Oe. $6,902,241
CMS Corporation's balance sheet as of today is as follows: Long-term debt (bonds, at par) $10,000,000 Preferred stock 1,700,000 Common stock ($10 par) 10,000,000 Retained earnings 4,600,000 Total debt and equity $26,300,000 The bonds have a 3.8% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 11.1%, so the bonds now sell below par. What is the current market value of the firm's debt? Group of answer choices $5,429,902 $5,656,148 $5,260,218 $6,165,201 $5,938,955
CMS Corporation's balance sheet as of today is as follows: Long-term debt (bonds, at par) $10,000,000 Preferred stock 2,000,000 Common stock ($10 par) 10,000,000 Retained earnings 4,000,000 Total debt and equity $26,000,000 The bonds have a 7.5% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the firm's debt?
+ CMS Corporation's balance sheet as of today is as follows: Long-term debt (bonds, at par) Preferred stock $10,000,000 Common stock ($10 par) Retained earnings Total debt and equity 2,000,000 10,000,000 4,000,000 $26,000,000 ப The bonds have a 8.3% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the firm's debt? Select the correct answer. a. $7,877,532 b. $7,879,129 c. $7,878,597 d. $7,879,661 e. $7,878,065
Company A's balance sheet as of today is as follows: Long-term debt (bonds, at par) Preferred stock Common stock ($10 par) Retained earnings Total debt and equity $10,000,000 2,000,000 10,000,000 4,000,000 $26,000,000 The bonds have a 4.0% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the firm's debt? a. $5,412,032 b. $5,479,822 c. $5,751,032 d. $5,549,671 e. $5,249,841
A company issued 8%, 10-year bonds with a face amount of $71 million. The market yield for bonds of similar risk and maturity is 9%. Interest is paid semiannually. At what price did the bonds sell? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Enter your answers in whole dollars. Round final answers to the nearest whole dollar.)
A company issued 6%, 15-year bonds with a face amount of $75 million. The market yield for bonds of similar risk and maturity is 6%. Interest is paid semiannually. At what price did the bonds sell? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Enter your answers in whole dollars. Round final answers to nearest whole dollar.) X Answer is complete but not entirely correct. Table values are based on: Cash Flow Interest Principal n = i = Price of bonds $ $ 30 3.0% Amount ›› Present Value 2 × $ 75 X $ 44 X 31 X 75
A company issued 9%, 10-year bonds with a face amount of $100 million. The market yield for bonds of similar risk and maturity is 8%. Interest is paid semiannually. At what price did the bonds sell? Note: Do not round intermediate calculations. Round your final answer to the nearest whole dollar. Use tables, Excel, or a financial calculator.(FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Price of bonds
Whipple Corp. just issued 245,000 bonds with a coupon rate of 5.81 percent paid semiannually that mature in 30 years. The bonds have a YTM of 6.25 percent and have a par value of $2,000. How much money was raised from the sale of the bonds? a-$885.02 million b-$490.00 million c-$430.22 million d-$460.95 million e-$442.51 million
A company issued 5%, 20-year bonds with a face amount of $80 million. The market yield for bonds of similar risk and maturity is 6%. Interest is paid semiannually. At what price did the bonds sell? Note: Do not round intermediate calculations and round you final answer to nearest whole dollar. Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Assume that Western Asset Management Company LLC (WAMC) has $10,000 par value zero-coupon bonds outstanding. WAMC bonds are currently trading at $5,500 with 8 years to maturity. WAMC tax bracket is 35%. Calculate the cost of debt for WAMC (System will not accept percentage (%) sign, therefore write your answer upto four decimals).
Oriole Corp. has 18-year bonds outstanding. These bonds, which pay interest semiannually, have a coupon rate of 9.235 percent and a yield to maturity of 7.4 percent. Assume face value is $1,000. Compute the current price of these bonds. (Round answer to 2 decimal places, e.g. 15.25.)

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Long-term debt (bonds, at par)	$10,000,000
Preferred stock	2,000,000
Common stock ($10 par)	10,000,000
Retained earnings	4,000,000
Total debt and equity	$26,000,000