Use the Data Provided on Cadbury to Answer the Question

question 55

Multiple Choice

Use the data provided on Cadbury to answer the question below.The risk free rate is 4.25%.The expected return on the market portfolio is 9.75%.The corporate tax rate is 40%.The face value of Cadbury's outstanding bonds is 2.450 billion pounds sterling.The coupon rate on Cadbury's bonds is 4.5%.Assume that the bonds pay annual coupons.The yield to maturity on Cadbury's bonds is 4.5%.Cadbury's bonds mature in 7 years.Cadbury has 1.650 billion common shares outstanding.The market price of Cadbury's common shares as of Dec 31,2008 is 6.25 pounds sterling.Cadbury's Beta is 0.8.What is the market value of Cadbury's bonds?

• A) £0.13B
• B) £1.65B
• C) £1.80B
• D) £2.45B
• E) £2.49B

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Definitions:

Clinical Significance

The extent to which a treatment or intervention produces a meaningful change or effect that impacts a patient's symptoms, functioning, or quality of life.

Insufficient Symptoms

A situation where the number of symptoms present is below the threshold required for a clinical diagnosis, often leading to challenges in treatment planning.

Bizarre Behavior

Extremely strange or unusual actions or conduct, often indicative of psychological distress.

Interpersonal Relations

Refers to the social connections and interactions between two or more individuals in various settings, including personal and professional contexts.