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ANEK [815]
3 years ago
12

Keys Printing plans to issue a $1,000 par value, 20-year noncallable bond with a 7.00% annual coupon, paid semiannually. The com

pany's marginal tax rate is 40.00%, but Congress is considering a change in the corporate tax rate to 45.00%. By how much would the component cost of debt used to calculate the WACC change if the new tax rate was adopted? a. –0.30% b. –0.35% c. –0.36% d. –0.44%
Business
1 answer:
sveticcg [70]3 years ago
3 0

Answer:

option b) -0.35%

Explanation:

For tax rate = 40%

After after-tax cost of debt = cost of debt × ( 1 - Rate )

= 7% × ( 1 - 0.40 )

= 4.20%

For tax rate = 45%

After after-tax cost of debt = cost of debt × ( 1 - Rate )

= 7% × ( 1 - 0.45 )

= 3.85%

Therefore, the change in cost of debt = 3.85% - 4.20% = -0.35%

Hence,

Correct answer is option b) -0.35%

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What factors under the control of owners and managers make a firm successful and allow it to earn economic​ profits?
mafiozo [28]

Answer: E. The firm's ability to differentiate its product

Explanation:

The factor under the control of owners and managers that make a firm successful and allow it to earn economic​ profits is the firm's ability to differentiate its product.

Product Differentiation has to do with making a product unique from that of its rivals so that it'll be attractive to the customers and the target market. This will slow be vital for the company to produce at a average cost that is lower than that of its competing firms. This will help the company to have a competitive edge over others.

8 0
2 years ago
A company anticipates monthly sales of $300,000 for the months of April, May, June, and July. Materials represent 50% of sales,
Vlada [557]

The company's total cash payments in May is $195,500 and this can be determined by preparing a cash budget.

<h3>What is a cash budget?</h3>

A cash budget is a company's estimation of its cash inflows and outflows over a specified period of time. A cash budget provides a company with financial insight into its cash requirements, including shortages and surpluses.  The preparation of a cash budget helps the company to determine an efficient use of its available cash.

Data and Calculations:

                                                April            May           June            July

Anticipated sales             $300,000   $300,000   $300,000    $300,000

Purchases                           150,000    $150,000       150,000       150,000

Labor costs                           16,000        19,000         16,000          21,000

Fixed overhead                    12,000        12,000         12,000          12,000

General and admin. exp.      2,000          2,000          2,000           2,000

Interest expense                                       2,500

Equipment purchase                               10,000

Total cash payments in May             $195,500

Thus, the company's total cash payments in May is $195,500.

Learn more about cash budgets at brainly.com/question/8707644

3 0
2 years ago
​Wellness, a healthy living​ magazine, collected in subscription revenue on May 31. Each subscriber will receive an issue of the
PIT_PIT [208]

Answer: $220,000

Explanation:

Using the Accrual Method of Accounting means that revenue is only to be recorded when it is earned i.e. when services have been delivered.

Any revenue received when the services have not been delivered will be recorded as Unearned Revenue.

With $528,000 in subscription revenue, the monthly subscription is;

= 528,000/12

= $44,000

From June to December would be 7 months so they would have earned;

= 44,000 * 7

= $308,000

The amount that they have not earned but have received would therefore be;

= 528,000 - 308,000

= $220,000

<em>This amount will be recorded after they finish deliveries of magazines in next year May. </em>

7 0
3 years ago
Jasmine Carmichael has been called for jury duty. When Jasmine reports for jury duty, she is sent to a court room with others fo
belka [17]

Answer:

a. ​Jasmine can be removed for cause.

Explanation:

Voir Dire is the questioning phase of jury selection in which the attorneys of both sides ask questions to see if the jury members are qualified.

When someone is removed for cause it means that the attorney thinks that the jury member can't be impartial based on bias or conflict.

In this case Jasmine can't be impartial because of her past relationship with the prosecutor.

5 0
3 years ago
In pioneer​ ville, the price elasticity of demand for bus rides is 0.5. when the price of a bus ticket rises by 5​ percent, ____
lianna [129]
The quantity of bus rides demanded decreases by 2.5 percent. Hope this helps. :)
4 0
3 years ago
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