A company plans Notes

  • A company plans to issue 10-year bonds with annual interest payments and with 40 warrants attached. Each warrant is expected to have a value of $1.50

    [http://student.land/a-company-plans-to-issue-10-year-bonds-with-annual-interest-payments-and-with-40-warrants-attached-each-warrant-is-expected-to-have-a-value-of-1-50/](http://student.land/a-company-plans-to-issue-10-year-bonds-with-annual-interest-payments-and-with-40-warrants-attached-each-warrant-is-expected-to-have-a-value-of-1-50/)"},{"left":"A company plans to issue 10-year bonds with annual interest payments and with 40 warrants attached. Each warrant is expected to have a value of $1.50\n\n


  • A company plans

    http://assignment.store/a-company-plans-to-issue-10-year-bonds-with-annual-interest-payments-and-with-40-warrants-attached/\n\n \n\n1. A company plans to issue 10-year bonds with annual interest payments and with 40 warrants\n\nattached. Each warrant is expected to have a value of $1.50. A similar straight-debt issue would require\n\nan 11% coupon. What coupon rate should be set on the bonds-with-warrants so that the package will\n\nsell for $1,000? 2. Use the following data for Marcus, Inc. to determine the minimum price (or "floor price") at which the\n\ncompany's convertible bonds should sell. Round to the nearest whole dollar.\n\nMaturity: 20 years\n\nStock price: $40.00\n\nPar value: $1,000\n\nConversion price: $45\n\nAnnual coupon: 8%\n\nStraight debt yield: 10% 3. Sullivan Corporation issued 12% convertible debentures that were issued at par and currently sell for\n\n$1,075. Each debenture can be converted into 25 shares of common stock. The company's current\n\nstock price is $42. What is the conversion value of the bond? 4. Cameron Corp. is evaluating whether to issue bonds or preferred stock. Which of the following\n\nstatements is correct?\n\nA. Bonds can have a convertible feature, but preferred stock cannot.\n\nB. Interest on bonds is tax deductible\n\nC. Dividends on preferred stock are tax deductible\n\nD. Preferred stock is riskier to the company than bonds.\n\nE. None of the above. 5. Cambridge, Inc. is a large public company that operates throughout the world. It uses a centralized\n\napproach and makes most of the decisions for its many subsidiaries. Bridgeston is also a large public company that operates throughout the world. It uses a decentralized approach and its subsidiaries make\n\nmost of their own decisions. Which of the following is correct?\n\nA. Agency costs would be the same for both companies\n\nB. Agency problems would probably be less pronounced for Cambridge because it is less likely that\n\nsubsidiary decisions would conflict with the parent\n\nC. Agency problems would probably be less pronounced for Bridgeston because it is less likely that\n\nsubsidiary decisions would conflict with the parent\n\nD. Agency problems would be the same for both companies\n\nE. None of the above. 6. Barriers to hostile takeovers include\n\nA. Targeted share repurchases\n\nB. Shareholder rights provisions\n\nC. Poison pills\n\nD. All of the above\n\nE. None of the above 7. A poison pill is a method to restrict voting rights\n\nA. True\n\nB. False 8. Which of the following statements is correct with regard to ESOPs:\n\nA. ESOPs don't improve worker productivity nor help prevent hostile takeovers\n\nB. ESOPs help prevent hostile takeovers, but don't help to improve worker productivity\n\nC. ESOPs help improve worker productivity, but do not help prevent hostile takeovers.\n\nD. ESOPs help prevent hostile takeovers and also help improve worker productivity\n\nE. None of the above\n\n "},{"left":"","right":""},{"left":"","right":""},{"left":"","right":""}]


  • A company plans to issue 10-year bonds with annual interest payments and with 40 warrants attached. Each warrant is expected to have a value of $1.50

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