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ochremacaw68Lv1
28 Sep 2019
The Landers Corporation needs to raise $1.60 million of debt ona 20-year issue. If it places the bonds privately, the interestrate will be 10 percent. Twenty thousand dollars in out-of-pocketcosts will be incurred. For a public issue, the interest rate willbe 9 percent, and the underwriting spread will be 2 percent. Therewill be $120,000 in out-of-pocket costs. Assume interest on thedebt is paid semiannually, and the debt will be outstanding for thefull 20-year period, at which time it will be repaid. Use AppendixB and Appendix D for an approximate answer but calculate your finalanswer using the formula and financial calculator methods.
For each plan, compare the netamount of funds initially available
The Landers Corporation needs to raise $1.60 million of debt ona 20-year issue. If it places the bonds privately, the interestrate will be 10 percent. Twenty thousand dollars in out-of-pocketcosts will be incurred. For a public issue, the interest rate willbe 9 percent, and the underwriting spread will be 2 percent. Therewill be $120,000 in out-of-pocket costs. Assume interest on thedebt is paid semiannually, and the debt will be outstanding for thefull 20-year period, at which time it will be repaid. Use AppendixB and Appendix D for an approximate answer but calculate your finalanswer using the formula and financial calculator methods.
For each plan, compare the netamount of funds initially available |
Elin HesselLv2
28 Sep 2019
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