provide correct answer please +CMS Corporation's balance sheet as of today is as follows:Long-term debt (bonds, at par)Preferred stock$10,000,000Common stock ($10 par)Retained earningsTotal debt and equity2,000,00010,000,0004,000,000$26,000,000பThe 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%, sothe bonds now sell below par. What is the current market value of the firm's debt?Select the correct answer.a. $7,877,532b. $7,879,129c. $7,878,597d. $7,879,661e. $7,878,065

To determine the current market value of the firm's debt, we will need to calculate the present…

Answered: + CMS Corporation's balance sheet as of…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

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) 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
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 4.3% 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. $5,584,881 b. $5,585,681 c. $5,584,080 d. $5,587,282 e. $5,586,482
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?
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
CALCULATE WACC BASED ON THE FOLLOWING FIGURES: Bonds $35,000,000 (35%) Preferred Stock $15,000,000 (15%) Common Equity $50,000,000 (50%) Total $100,000,000 Data to be used in the calculation of the cost of debt: Par value = $1,000, non-callable Market value = $1,085.59 Coupon interest = 6%, annual payments Remaining maturity = 20 years New bonds can be privately placed without any flotation costs Data to be used in the calculation of the cost of preferred stock: Par value = $100 Annual dividend = 7.5% of par Market value = $102 Flotation cost = 4% Data to be used in the calculation of the cost of common equity: CAPM data: VEC’s beta = 1.2 The yield on T-bonds = 3% Market risk premium = 7% DCF data: Stock price = $27.08 Last year’s dividend (D0) = $2.10 Expected dividend growth rate = 4% Bond-yield-plus-risk-premium data: Risk premium = 5.5% Amount of retained…
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 7%, 20-year bonds with a face amount of $82 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 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) Price of bonds ........
The following data apply to Neuman Corporation's convertible bonds: Maturity: 10 Stock price: $30.00 Par value: $1,000.00 Conversion price: $35.00 Annual coupon: 5.00% Straight-debt yield: 8.00% Refer to the data for the Neuman Corporation's convertible bonds. What is the bond's straight-debt value? a. $758.76 b. $838.63 c. $720.82 d. $798.70
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).

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