Synergy is obtained by apportioning financial resources among divisions to increase financial returns or spread risks among diff
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Answer:
Pretax = 5.61%
After tax = 4.26%
Explanation:
The cost of debt will be the Yield to maturity of the bonds.
91 = present values of the 25 year annuity + present value of the maturity
There is no formula for exact YTM
we can either use excel or calculate by approximation:
In this case we will calcualte the YTM by aprroximation
C= 25 cuopon payment 1,000 x 5% / 2 becayse paymenr are semiannually
F= 1000 the face value is 1,000
P= 910 the present value or market value is 91% of the face value
n= 50 25 year at 2 payment per year
dividend 26.8
divisor 955
YTM 5.6125654%
This will be the pretax cost of debt
then we calculate the after tax cost of debt
pre-tax cost of debt ( 1 - t ) = after-tax
5.61% ( 1 - .24 ) = 4,2636
Answer:
Here's my Macroeconomic model.
Explanation:
Thus, the five-sector model includes (1) households, (2) firms, (3) government, (4) the rest of the world, and (5) the financial sector. The financial sector includes banks and non-bank intermediaries that engage in borrowing (savings from households) and lending (investments in firms).
