Answer:
the annual pre-tax cost of debt is 10.56%
Explanation:
the beore-tax component cost of debt will be the actual market rate of the bonds, as they offer an interest rate of 11% but are selling at 104 points not at par thus, there is a difference between the rates.
We solve for the rate which makes the coupon and maturity 104
with excel or a financial calculator
PV of the coupon payment
C 5.500 (100 x 11%/2)
time 60 (30 years x 2 payment per year)
rate <em>0.052787474</em>
PV $99.4338
PV of the maturity
Maturity 100.00
time 60.00
rate <em>0.052787474</em>
PV 4.57
<em><u>Adding both we should get 104 which is the amount the bonds is selling:</u></em>
PV coupon $99.4338 + PV maturity $4.5662 = $104.0000
The rate is generated using goal seek or wiht a financial calculator.
This rate is a semiannual rate, so we multiply by 2 to get the annual cost of debt:
0.052787474 x 2 = 0.105574947
The cost of debt for the firm is 10.56%
Answer:
C) III
- III. No, the policy was excluded from Joseph's estate.
Explanation:
It doesn't matter who pays the policy's premiums, what matters is who is the beneficiary of the policy. If the proceeds of the policy are paid to the insured's estate, then they are part of it, but if the proceeds are paid to another beneficiary, then they are not included in the estate.
Since Joseph's wife was the owner and beneficiary of the policy, the proceeds will be paid directly to her. The advantage here is that proceeds from the life insurance policy are not taxed as income, but if Joseph's state was larger than $5.43 million, then estate taxes might apply.
The earliest elections will come effective on January 1, 2016 for case a, b, d anf January 1, 2017 for rest options.
<h3>For different
alternative scenarios:</h3>
a.) Jane is on top of things and makes the election on January 1, 2016.
January 1, 2016
b.) Jane is mostly on top of things and makes the election on January 15, 2016.
January 1, 2016
c.)Jane makes the election on February 10, 2016. She needed a little time to convince a C corporation shareholder to sell its stock to a qualifying shareholder. That process took all of January, and she was glad to have it over with.
January 1, 2017
d.)Jane makes the election on March 14, 2016.
January 1, 2016
e.)Jane makes the election on February 5, 2016. One of the shareholders refused to consent to the S election. He has since sold his shares (on January 15, 2016) to another shareholder who consented to the election.
January 1, 2017
To view similar question about election scenarios, refer to:
brainly.com/question/17101454
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Answer:
The correct answer is option B.
Explanation:
The total revenue and profits of the industry as the price level increases with increase in the demand.
When there is an increase in the demand for the output of an industry, that industry will increase the production to match the increase in the demand. The increase in production will cause output level to increase.
In order to produce more output the industry will require more inputs, so the demand for inputs will increase.
An increase in the demand for inputs will be accompanied by increase in their prices.
There will not be any decline in the price of inputs.
Hello!
The price rises when the quality rises, because the quality of the product depends on the quality of the feedstock.
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