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
The manager of the bank where you work tells you that your bank has $6 million in excess reserves. She also tells you that the b
sukhopar [10]

Answer and Explanation:

The computation of the reserve requirement is given below;

Required reserves is

= Deposits - loans - excess reserves

= $400 - $362 - $6

= 32 million

And,  

Required reserve ratio is

= Required reserves ÷ Deposits

= 32 ÷ 400

= 8%

In this way, it should be determined so that the correct value & percentage could come

3 0
2 years ago
At December 31, 2018, Oriole Company reported the following information on its balance sheet.
drek231 [11]

Answer:

Bad debt expense (Dr.) $68,930

Allowance for Doubtful Debt (Cr.) $68,930

Explanation:

Accounts Receivable :

Balance $948,000

Add: Sales $3,609,930

Less: Sales returns $51,000

Less: Collections $2,756,000

Less: Write offs $97,000

Add: Recovery of old Bad debts $28,000

Adjusted Balance $1,653,930

Bad Debts :

Balance $78,000

Less: Allowance for doubtful debts $97,000

Less: Recovery $28,000

Adjusted Balance $9,000

7 0
3 years ago
Big Sky Sports sells hunting and fishing equipment and provides guided hunting and fishing trips. Big Sky Sports is owned and op
stiv31 [10]

Answer:

(a)

1. Kalispell State Bank

2. Glacier Boutique

3. Big Sky Sports

4. Kalispell State Bank

5. Big Sky Sports

6. Big Sky Sports

7. None of the above

8. Glacier Boutique

9. None of the above

10. Big Sky Sports

(b) Business transactions refers to the transactions that are related to only business, such as purchase of land, machinery, goods for business purposes. Any type of personal transaction is not included in business transaction.

6 0
2 years ago
George is trying to teach his two-year old son to gently caress their cat. George softly strokes the animal and every time his s
harkovskaia [24]

Letter C is correct. Retention processes.

The failure in the social learning process is in the retention process. This process occurs when the behavior is not remembered after observation. This is what happens when George's son does not repeat proper behavior with the cat when not being observed, because he does not remember. To avoid this failure it is necessary to reproduce the learning process until a memory is formed to identify the expected behavior.

3 0
3 years ago
Taking a self-assessment test is a good way to learn about your self and careers that are suitable for you
Anit [1.1K]
Yeah good point ........
4 0
3 years ago
Other questions:
  • What is the difference between excluded services and services that are not reasonable and necessary?
    14·1 answer
  • If the total utility from consuming the fifth unit of a product is 6 and the total utility from all five units is 162, then the
    6·1 answer
  • Cyclical unemployment is BEST described as unemployment arising from A) the elimination of jobs as a result of technological cha
    11·1 answer
  • How do employees and managers know what decision-making authority they have regarding firm assets?
    11·1 answer
  • Jane has been working on statistical process control to fine-tune the process that she manages. Jane has taken one million sampl
    8·1 answer
  • Two years ago, the de Castellane Manufacturing Company included its employees in a profitsharing plan in which workers receive s
    9·1 answer
  • Most routine business messages will follow the​ _____
    12·1 answer
  • You purchased XYZ stock at $50 per share. The stock is currently selling at $80. You expect the stock price to go up, but not 10
    11·1 answer
  • True or False: It was better for the united states not to receive this foreign investment because it decreases economic growth
    5·1 answer
  • How does government pay for
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!