Accounting Question: Estimate Sprint Nextels cost of debt capital
Accounting
Question:
Sprint Nextel Corporation (S) has $17.7 billion in total debt (which approximates its market value.) Each year this debt costs the company about $1.5 billion in interest expense. The company’s market capitalization approximates $17.2 billion, its market beta is estimated 2.12, and its marginal tax rate is 35%. Assume that the risk-free rate equals 5.2% and the market premium equals 5.6%. Rounding Instructions: Do not round until your final answers. Round answers to one decimal place. (a) Estimate Sprint Nextel’s cost of debt capital. Please show work!
————————————————
Finance
Question:
K Inc. has 6% coupon bonds on the market that have 8 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 7%, what is the current bond price ?
————————————————
Finance
Question:
Mullineaux Corporation has a target capital structure of 70 percent common stock, 10 percent preferred stock, and 20 percent debt. Its cost of equity is 12 percent, the cost of preferred stock is 6 percent, and the pretax cost of debt is 8 percent. The relevant tax rate is 40 percent.  a. What is the company’s WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)    WACC %      b. What is the aftertax cost of debt? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
