QUESTION 36 The current stock price for a company is $43 per share, and there ar
ID: 2478701 • Letter: Q
Question
QUESTION 36 The current stock price for a company is $43 per share, and there are 5 million shares outstanding. This firm also has 140,000 bonds outstanding, which pay interest semiannually. If these bonds have a coupon interest rate of 8%, 12 years to maturity, a face value of $1,000, and a current price of 1,124.45, what is the total market value of this firm? (Answer to the nearest dollar, but do not use a dollar sign).
QUESTION 37 The current stock price for a company is $36 per share, and there are 3 million shares outstanding. This firm also has 120,000 bonds outstanding, which pay interest semiannually. If these bonds have a coupon interest rate of 8%, 20 years to maturity, a face value of $1,000, and an annual yield to maturity of 7%, what is the total market value of this firm? (Answer to the nearest dollar, but do not use a dollar sign).
Explanation / Answer
Total Market Value is determined by Multiplying Total Shares outstanding with current traded market price of shares.
Ans: 36
Market Value of Firm = 43 * 5000000 = 21,50,00,000
Ans 37:
Market Value of Firm= 36 * 3000000 =10.80.00,000