Their income increases, being that the relationship between education and income is positive
The Sandwhich technique is a strategy used when giving constructive feedback.
Answer:
Allocates a portion of the total discount to interest expense each interest period.
Explanation:
First, we understand that once a bond is issued at a discount, the first implication is the existence of a debit figure representing the discount on the bond issued.
However, the treatment of this discount figure is this:
First, the difference between the interest based on the effective interest rate of the carrying value of the bond and the interest based on the coupon rate on the face value of the bond is calculated. Once calculated, the discount figure is then amortized to the value of the difference between the two interest figures.
As such, amortizing discount on bonds affects the interest expense each interest period.
Answer:
$1,879,215.61
Explanation:
Given that,
EBIT = $320,000
Current cost of equity = 12.3%
Tax rate = 40 percent
Value of perpetual bonds = $936,000
Annual coupon rate = 6.5 percent at par
Value of the unlevered firm:
= [EBIT × (1 - Tax rate)] ÷ Current cost of equity
= [$320,000 × (1 - 0.4)] ÷ 0.123
= $192,000 ÷ 0.123
= $1,560,975.61
Value of the levered firm:
= Value of the unlevered firm + (Tax rate × Value of perpetual bonds)
= $1,560,975.61 + (0.34 × $936,000)
= $1,560,975.61 + $318,240
= $1,879,215.61
The answer is: B) Buying securities (Bonds)
Money supply refers to the amount of money that circulated in the country. When government buy securities from the private sector, the money would be exchanged from the government's purse to the private sector's. If this occurs, the amount of money that circulated would be increased.