Answer:
The correct answer is letter "D": Preferred stock at 6.0%.
Explanation:
After-Tax Return is the revenue companies earn after the tax deduction according to the bracket they fall into. It expresses the firm's real earnings ad can be expressed in ratios (percentages). Calculating the after-tax return implies considering all the profits an organization had within a period and all its costs.
In the example:
- After-tax return on Treasury bonds = 5% x (1 - 0.34) = 3.3%
- After-tax return on corporate bonds = 8% x (1 - 0.34) = 5.28%
- After-tax return on municipal bonds = 5% x (1 - 0.34) = 3.3%
- After-tax preferred return = Before-tax preferred stock yield x [1 - (Tax rate)(0.30)] = 0.06 x [1 - (0.15)(0.30)] = 5.73%
Then, the highest after-tax return is provided by investing in preferred stocks at 6.0%.
Answer: level of national income expands by $100 million
Explanation: The level of National income expands by $100 million. National income which can also be termed GDP(gross domestic product) is the measure of measure of economic production in a country over a specific time.
Increase in GDP is caused by a whole number of factors some of which includes;
*Increase in productivity
*Increase in investment
*Government spending etc.
All the listed above are examples of what the Government has done with the acquired $100 million in tax.
Answer:
$23,060
Explanation:
Land improvement cost comprises of cost spent on the upgrade of a given land and which are subject to wear and tear. They differ from the cost of the land itself which are not depreciable. Accounting rules require that land improvement costs are depreciated, whereas the cost of land itself is not depreciated.
In the given question, the cost of land include the cost of acquisition, survey and legal fees, and land clearing fees. These costs are necessary to acquire title on the land and make it ready for use.
Land improvement cost, on the other hand, include fencing and the cost of installing lighting and signage. This is because these items will depreciate and may need to be replace after some time.
Therefore, land improvement cost = cost of fencing + cost to install lighting and signage
=$9,000 + $14,060
= $23,060.
Because the analyst is compelled to make assumptions for model inputs, valuation research is primarily based on science with a small amount of art. Bond and stock valuation are a few further uses, along with capital budgeting. The concept that its future earnings potential, a sum of money, is worth more today than it will be later.
What is valuation analysis?
A technique called valuation analysis is used to determine the approximate value or worth of any kind of asset, including businesses, stocks, fixed-income securities, commodities, real estate, and other assets.
Because the analyst must make assumptions for model inputs, valuation analysis is primarily a scientific process but also involves certain artistic elements. An asset's worth is essentially the sum of its present value (PV) for all anticipated future cash flows.
The time value of money is used in various financial contexts, such as capital planning, bond and stock valuation. Finding what a current investment will increase to in the future is the process of determining future worth. Compounding is the term for this.
Hence, the significance of the valuation analysis is aforementioned.
Learn more about on valuation analysis, here:
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