1. Grand Advent,3. A Japanese com,10. Central Systems,11. Miller Manufactur,12. Filer Manu13. Titan

Aug 3rd, 2016
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1. Grand Adventure Properties offers a 8 percent coupon.... 3. A Japanese company has a bond outstanding that sells for 89 ..... 10. Central Systems, Inc. desires a weighted average cost of capital of 9 percent.... 11. Miller Manufacturing has a target debt–equity ratio of .50. Its cost of equity is 15 percent.... 12. Filer Manufacturing has 5 million shares of common stock outstanding.... 13. Titan Mining Corporation has 9.7 million shares of common stock outstanding and 410,000 --4 percent .....

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1. Grand Adventure Properties offers a 8 percent coupon bond with annual payments. The yield tomaturity is 6.85 percent and the maturity date is 8 years from today. What is the market price of thisbond if the face value is $1,000?$951.69$1,069.07$1,077.18$877.51$1,020.76Per value bond outstanding/Face Valuecoupon rate/ coupon paymentyield to maturity/interest rateMaturityMarket Value of Bond1000806.85%8$1,069.073. A Japanese company has a bond outstanding that sells for 89 percent of its 100,000 parvalue. The bond has a coupon rate of 4.8 percent paid annually and matures in 19 years.What is the yield to maturity of this bond? (Do not round intermediate calculations and enteryour answer as a percent rounded to 2 decimal places, e.g., 32.16.)Yield to maturityPar ValueMarket ValueCoupon RateMaturity (Years)Annual Coupon5.77%100000890004.80%19480010. Central Systems, Inc. desires a weighted average cost of capital of 9 percent. The firmhas an after-tax cost of debt of 6 percent and a cost of equity of 12 percent. What debtequity ratio is needed for the firm to achieve its targeted weighted average cost ofcapital?1.001.17.901.10.83Weighted Avrage CostAfter Tax Cost of DebtCost of Equity9.00%6.00%12.00%EQUATION9% = [(Wk*12%)]+[(1-Wk)*6%]Or, 0.09 = 0.12Wk+0.06 -0.06WkOr, 0.09 - 0.06 = 0.12Wk -0.06WkOr, 0.03 = 0.06WkOr, Wk = 0.03/0.06Or, Wk = 0.50Weight of EquityWeight of DebtDebt -Equity Ratio0.50.51.001

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