Note: Round your answers for each question as instructed. But carry your unrounded values forward to the later parts of the question where required. Planet Express has issued a 30-year, 6.4%...


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Note: Round your answers for each question as instructed. But carry your unrounded values forward to the later parts of the question where required.<br>Planet Express has issued a 30-year, 6.4% half-yearly bond six years ago. The bond currently sells for 97.7% of its face value. The firm's tax rate is 30.0%.<br>A) Using the above information only, find Planet Express's pre-tax cost of debt?<br>% per annum compounded annually<br>(Round your answer to two decimal places)<br>Suppose the book value of the above Planet Express coupon bond issue is $75.0 million. In addition, the company has a second debt issue, a zero-coupon bond with seven years left to maturity;<br>the book value of this issue is $63.0 million, and it sells for 50.9% of par.<br>B) Find the yield on Planet Express's zero-coupon bond as an EAR.<br>(Round your answer to two decimal places)<br>C) Given all of the above information, what is the overall pre-tax cost of debt for Planet Express now?<br>(Round your answer to two decimal places)<br>Assume that Planet Express has common equity with a cost of 16.5% per annum and a market value of $95.0 million. In addition, assume that they have a preference share issue with a cost<br>of 12.7% per annum and that trades for a market value of $24.0 million-<br>D) Find the WACC for Planet Express (assuming they operate under a classical taxation system).<br>(Round your answer to two decimal places)<br>Check<br>

Extracted text: Note: Round your answers for each question as instructed. But carry your unrounded values forward to the later parts of the question where required. Planet Express has issued a 30-year, 6.4% half-yearly bond six years ago. The bond currently sells for 97.7% of its face value. The firm's tax rate is 30.0%. A) Using the above information only, find Planet Express's pre-tax cost of debt? % per annum compounded annually (Round your answer to two decimal places) Suppose the book value of the above Planet Express coupon bond issue is $75.0 million. In addition, the company has a second debt issue, a zero-coupon bond with seven years left to maturity; the book value of this issue is $63.0 million, and it sells for 50.9% of par. B) Find the yield on Planet Express's zero-coupon bond as an EAR. (Round your answer to two decimal places) C) Given all of the above information, what is the overall pre-tax cost of debt for Planet Express now? (Round your answer to two decimal places) Assume that Planet Express has common equity with a cost of 16.5% per annum and a market value of $95.0 million. In addition, assume that they have a preference share issue with a cost of 12.7% per annum and that trades for a market value of $24.0 million- D) Find the WACC for Planet Express (assuming they operate under a classical taxation system). (Round your answer to two decimal places) Check

Jun 04, 2022
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