Project #2060 - Capital Planning

Unit 2 - Capital Planning Strategies Collapse
 
   Reading Assignment: Bruner, Case # 9-10 & 39
     Assignment Type: Individual Project   Deliverable Length: Word document of 1–2 pages, and an Excel spreadsheet   
Points Possible: 115   Due Date: 1/20/2013 11:59:59 PM  CT   

Download the Excel file for this assignment.

Using the attached Excel file, respond to the following questions:

  • Assume that UPC is issuing a 10-year, $10,000 par value bond with a 6% annual coupon if its required rate of return is 6%. What is the value of this bond? Show your calculations in the Excel file.
  • If the coupon rate changes to 7%, would UPC be issuing a discount or a premium bond? Show your calculations in the Excel file.
  • If the coupon rate changes to 5%, would UPC be issuing a discount or a premium bond? Show your calculations in the Excel file.
  • What are the values of the 5%, 6%, and 7% coupon bonds over time if the required return remained at 6%? Complete the table for years 1–8.
  • Assume that UPC was successful in generating $15 million from its bond issue. Design a strategy for the financing of project C. Respond using a Word document.

Please submit your assignment

Subject Business
Due By (Pacific Time) 02/02/2013
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