Posted: October 22nd, 2022

# Corporate Finance – Problems to be solved in excel

Problem # 1 – What is the cost of new AND existing debt if the current price of the bonds is \$1,050? The bonds pay a semiannual coupon of \$80 (\$40 every six months), mature in 12 years, and have a face value of \$1,000.The floatation cost for debt is 5%.

Don't use plagiarized sources. Get Your Custom Essay on
Corporate Finance – Problems to be solved in excel
Just from \$13/Page

Problem # 2- Assume that you are considering the purchase of a \$1,000 par value bond that pays interest of \$70 each six months (Total of \$140 per year) and has 10 years to go before it matures. If you buy this bond, you expect to hold it for 5 years and then to sell it in the market. You (and other investors) currently require a nominal annual rate of return of 16%, but you expect the market to require a nominal rate of return of only 12% when you sell the bond due to a general decline in interest rates. How much should you be willing to pay for this bond today?

### Expert paper writers are just a few clicks away

Place an order in 3 easy steps. Takes less than 5 mins.

## Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
\$0.00

Order your essay today and save 20% with the discount code WELCOME