New Jet Airlines plans to issue 14-year bonds with a par value of $1,000 that will pay $60 every six months. The
bonds have a market price of $1,220. Flotation costs on new debt will be 4% of the selling price.
If the firm has a
35% marginal tax bracket, compute the following:
a. Yield to maturity of debt
b. After-tax cost of existing debt
c. After-tax cost of new debt
a. YTM = 9.18% (Using Yield Function in Excel with rate =.12, Pr = 122, Redemption = 100, Frequency = 2, and Basis
= 0)
b. After-tax cost of debt = 9.18% × (1-.
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The Norticon Group provides and manages computers and network systems for businesses and communities. Norticon sells its products through various means
It uses its sales force to sell to large customers and telemarketing to sell to smaller customers. The company also sells its products via the Internet. Briefly explain the marketing approach being used by the company.
An "implied" warranty will consist of
A) both a warranty of merchantability and a warranty of fitness for purpose. B) only a warranty of merchantability. C) only a warranty of fitness for purpose. D) neither a warranty of merchantability nor a warranty of fitness for purpose.