FIN 419 Expect Success/uophelp.com FIN 419 Expect Success/uophelp.com | Page 10

P11-2
Question : Grey’s pharmaceuticals has a new project that will require
funding of $13.0 million. The company has decided to pursue an alldebt scenario. Grey’s has made agreements with four lenders for the
needed financing. These lenders will advance the following amounts
at the interest rates shown:
P11-3
Question : Cost of debt. Kenny Enterorises has just issused a bond
with a par value of $1,000, a maturity of twenty years, and a coupon
rate of 9.4% with semiannual payments. What is the cost of debt for
Kenny Enterprises if the bond sells at the following prices? What do
you nitice about the price and the cost of debt?
a.
What is the cost of debt for Kenny Enterprises if the
bond sells at $941.16?
b. What is the cost of debt for Kenny Enterprises if the
bond sells at $1,000.00?
c.
What is the cost of debt for Kenny Enterprises if the
bond sells at $1,041.55?
d. What is the cost of debt for Kenny Enterprises if the
bond sells at $1,176.64?
P11-7
COST of Preffered Stock. Kyle is raising funds for his company by
selling preferred stock. The preferred stock has a par value os $83 and
a dividend rate of 10.4%. the stock for $59.45 in the market. What is
the cost of preferred stock for Kyle?

P 11-9
Stan is expanding his business and will sell common stock for the
needed funds. If the current risk-free rate is 4.3% and the expected