1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
EleoNora [17]
3 years ago
9

Micro Advantage issued a $5,250,000 par value, 15-year bond a year ago at 94 (i.e., 94% of par value) with a stated rate of 10%.

Today, the bond is selling at 115 (i.e., 115% of par value). If the firm’s tax bracket is 30%, what is the current after-tax cost of this debt?
Business
1 answer:
Minchanka [31]3 years ago
4 0

Answer:

7.45%

Explanation:

Total amount the firm received from bond issuance = $5,250,000 * 94%

= $4,935,000

The total coupon must be paid to bond holder annually

= Par value of $5,250,000 * coupon rate of 10%

= $5,250,000 * 10%

= $525,000

Rate of coupon paid over loan received = $525,000/ $4,935,000 = 10.64%

After-tax cost of this debt = 10.64%*(1-30%) = 7.45%

You might be interested in
In situation with high risk,credit might create further problems for the borrower.explain.​
rewona [7]

Answer:

Yes, In situation of high risk credit will create more problem due to bankruptcy.

Explanation:

I Think if business will buy more credit in times of high risk then business will end up in stage of bankcruptcy because in that situation business will making poor profits and no revenue so it won't be able to pay back debt.

3 0
3 years ago
Managers who are responsible for just one organizational activity are known as ______ managers.a. specialist b. first-line c. si
omeli [17]

Answer:

d. functional

Explanation:

A functional manager can be described as a managers whose responsibility is to manage an organizational unit such as a department within an organization.

A manager can be given the responsibility to manager a specific department such as marketing, engineering, IT,  or public relations.

The primary role of a functional manager is to be in charge and manage  resources in his department, and to also to direct the technical work of people working on a project under his functional area.

Therefore, managers who are responsible for just one organizational activity are known as <u>functional managers</u>. The correct option is d. functional.

5 0
3 years ago
Why does life have to be hard?
Misha Larkins [42]

Answer:

Life is hard because life needs to know if you're willing to fight. Willing to be strong when life is 'hard'. The second that you prove yourself with one challenge, another challenge show's up. Don't let life get you down. Be grateful for all you have. Live as if it's your last day. :>

Explanation:

7 0
2 years ago
Read 2 more answers
Tax return 12-59 assignment
Sonja [21]
What?






Explanation:

Good Luck

7 0
3 years ago
Suppose that interest rates decrease. Holding everything else constant, determine what happens to aggregate demand and its compo
RUDIKE [14]

Answer:

When interest rates decrease, It causes a ripple effect in the economy that stimulates growth and wealth creation. In the long run, it might cause inflation.

Explanation:

  • If interest rates decrease, consumption increases because there is more disposable income available in each household.
  • If interest rates decrease, investment increases since the cost of borrowing is cheaper.
  • If interest rates decrease, government spending decreases .
  • If interest rates decrease, the value of net exports increase because the economy us stimulated as a result of a business boom facilitated by low and affordable loans.
5 0
3 years ago
Other questions:
  • You are given the following information concerning Parrothead Enterprises:
    7·1 answer
  • The goal of ________ research is to describe things, such as the market potential for a product or the demographics and attitude
    13·1 answer
  • Organizations created to collect and distribute contributions to political campaigns are referred to as
    11·1 answer
  • A manufacturer of lawn care equipment has introduced a new product. The anticipated demand is normally distributed with a mean o
    6·1 answer
  • IE 9-2 ... PPF Model – If this economy has encountered a Recovery from Point "R" to Point "X" (as viewed by the Keynesian Model)
    6·1 answer
  • What will you need to create a lemonade stand?
    11·2 answers
  • For each level of output, calculate the variable cost (VC). For each level of output except zero output, calculate the average v
    11·1 answer
  • Waterway Industries provided the following information on selected transactions during 2021: Dividends paid to preferred stockho
    10·1 answer
  • According to Linda Hill's study, after six months as a manager, most of the new managers believed that their job was to:
    14·1 answer
  • A turnkey project includes Multiple Choice government investment. construction up to but not including actual production. direct
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!