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Author Question: In order to accurately assess the capital structure of a firm, it is necessary to convert its ... (Read 118 times)

joe3899

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on: Aug 7, 2023
In order to accurately assess the capital structure of a firm, it is necessary to convert its balance sheet figures to a market value basis. KJM Corporation’s balance sheet as of today is as follows:

​

Long-term debt (bonds, at par)

$9,000,000

Preferred shares

2,000,000

Common shares ($10 par)

13,000,000

Retained earnings

4,000,000

Total debt and equity

$28,000,000

​

The bonds have a 5% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 11 years from today. The yield to maturity is 14%, so the bonds now sell below par. What is the current market value of the firm’s debt?


◦

$6,076,050


◦

$6,300,485


◦

$6,529,120


◦

$6,750,510

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Marked as best answer by joe3899 on Aug 7, 2023

lactosetheintolerant

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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joe3899

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Reply 2 on: Aug 7, 2023
Thanks for the timely response, appreciate it

Bigfoot1984

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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