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Juliette [100K]
3 years ago
11

A $1,000 par bond is currently selling for $1,100. It has a 9% coupon rate, fifteen years remaining to maturity, and pays intere

st semi-annually. If the firm's tax rate is 35%, what is the after-tax cost of debt
Business
1 answer:
DanielleElmas [232]3 years ago
5 0

Answer:

$54.17 per bond

Explanation:

the journal entry to record the issuance of the bond:

Dr Cash 1,100

    Cr Bonds payable 1,000

    Cr Premium on bonds payable 100

The bond premium amortization using straight line amortization:

$100 / 30 = $3.33 per coupon payment

journal entry to record coupon payment:

Dr Interest expense 41.67

Dr Premium on bonds payable 3.33

    Cr Cash 45

the yearly interest expense = $41.67 x 2 = $83.34 x (1 - tax rate) = $83.34 x 0.65 = $54.17

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Which of the following is not an independent contractor relationship? a. one between a corporation and its outside legal counsel
oksano4ka [1.4K]

Answer:

The correct option C

Explanation:

Independent contractor are those people or individuals like lawyers, auctioneers, dentists, sun- contractors, accountants, public and contractors who are in the trade, profession or business independently and offer their services to the general public.

The relationship among the corporation and legal counsel and the relationship among the corporation and general counsel is the valid relationship.

So, the relationship which is not independent contractor is between or among the lawn service business and the homeowner.

5 0
3 years ago
For franklin, inc., sales is $1,500,000, fixed expenses are $450,000, and the contribution margin ratio is 36%. what are the tot
KengaRu [80]
The answer is "<span>$960,000".

This is how we calculate this;
</span><span>sales = $1,500,000
</span><span>fixed expenses = $450,000
</span><span>contribution margin ratio = 36% = 36/100 = 0.36
</span>total variable expenses = <span>($1,500,000) (1 – 0.36)
= (1,500,000)(0.64)
= $960,000</span>
6 0
3 years ago
The information content of a regular dividend increase generally signals that:Multiple Choicefuture dividends will be lower.the
Natali5045456 [20]

Answer:

management believes the future earnings of the firm will be strong

Explanation:

The information content with respect to the regular dividend would be increase when the company would have a greater amount of earnings in near future and they try to give the greater amount of dividend to the shareholders. This represent the management would trust that the earnings of the future of the firm would be strong

Hence, the last option is correct

5 0
2 years ago
Macro events only are reflected in the performance of the market portfolio because_________.
Afina-wow [57]

Macro events only are reflected in the performance of the market portfolio because the specific risks have been diversified away.

A market portfolio is a theoretical bundle of investments that consists of each kind of asset to be had within the investment universe, with each asset weighted in proportion to its total presence in the market. The predicted return of a market portfolio is equal to the expected go back of the market as a whole.

The market portfolio is a basket of assets created by an investor the use of varied set of investments. The basket can encompass securities like pension plans, mutual funds, shares, actual property, bonds, foreign currencies, and assets like silver, gold, coins, bitcoins to call some.

The basic expected return method includes multiplying every asset's weight in the portfolio via its anticipated return, then including all the ones figures together. In different words, a portfolio's anticipated return is the weighted average of its personal components' returns.

Learn more about market portfolio here: brainly.com/question/13673468

#SPJ4

4 0
1 year ago
You invest all the money you earned during your summer sales job (a total of $45,000) into the stock of a company that produces
erica [24]

Answer:

The annual rate of return of the invesment will be -14,97%

Explanation:

The initial investment is 45.000 and after 5 years the value of the investment is only 20.000. Here we can see a destruction of value (20.000 < 45.000). In finance, the time takes an essential part in calculation, so through the interest rate we calculated how bad was the investment in annual terms. The formula is as follows: Final investment value=(Initial investment*(1+interest rate)^(total years)) in our case would be: 20.000=(45.000*(1+interest rate)^(5)) From this formula we got -14,97%

8 0
3 years ago
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