Answer:
c. 32.99%
Explanation:
Risk yield = bond yield*(1 - Federal tax rate)
6.50% = 9.70%*(1 - Federal tax rate)
1 - Federal tax rate = 6.50%/9.70%
Federal tax rate = 1 - 6.50%/9.70%
= 32.99%
Therefore, The federal tax rate that you are indifferent between the two bonds is 32.99%
Answer:
c. 0.0819
Explanation:
The mean = 0.85
standard error of the proportion is: sp = sqrt(pq/n)
= sqrt ((.85)(0.15) / 51) = 0.05
P(0.9115 < X < 0.946) = P( (0.9115 - 0.85) / 0.05 < z < (0.946 - 0.85) / 0.05 )
= P(1.23 < z < 1.92)
= P(z < 1.92) - P(z < 1.23) = 0.0819
Answer:
Yes, her decision was correct because of Net present value rule.
Explanation:
the net present value (NPV) applies to a series of cash flows occurring at different times.
The present value of a cash flow depends on the interval of time between now and the cash flow. It also depends on the discount rate. NPV accounts for the time value of money. It provides a method for evaluating and comparing capital projects or financial products with cash flows spread over time, as in loans, investments, payouts from insurance contracts plus many other applications.
Time value of money dictates that time affects the value of cash flows.
Answer:
Matching terms:
1. The mix of accounts/Asset Structure
D. Asset Structure
2. The mix of all accounts/items on the right hand side of the balance sheet
C. Financial Structure
3. The mix of longer term items on the right side of the balance sheet explicitly used to fund the corporation:
B. Capital Structure
4. The ratio of debt to total assets:
A. Leverage
Explanation:
Options and definitions:
A. Leverage: the amount of debt a firm uses to finance its assets.
B. Capital Structure: the combination of long-term debt and equity.
C. Financial Structure: the mix of all of a company's liabilities and its equities.
D. Asset Structure: the distribution of a firm's asset base in different asset categories, like buildings, plant, and equipment.
