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tino4ka555 [31]
3 years ago
9

Avicorp has a $ 12.9 million debt issue​ outstanding, with a 5.9 % coupon rate. The debt has​ semi-annual coupons, the next coup

on is due in six​ months, and the debt matures in five years. It is currently priced at 93 % of par value. a. What is​ Avicorp's pre-tax cost of​ debt? Note: Compute the effective annual return. b. If Avicorp faces a 40 % tax​ rate, what is its​ after-tax cost of​ debt? ​Note: Assume that the firm will always be able to utilize its full interest tax shield.
Business
1 answer:
zloy xaker [14]3 years ago
8 0

Answer:

a)

Pre-tax Cost Of Debt = 7.64%

b)

Tax Rate = 40%    

Post Tax cost of debt = 7.33% * (1 - 40%) = 4.58%  

So Post Tax cost of Debt = 4.58%

Explanation:

Bond Par Value =  12,900,000  

Bond Market Price 93% of face value = 11,997,000  

Years To maturity = 5.00  

Annual Interest 5.9% = 761,100

Formula = [Annual Interest + (Par Value-Market Value) / Years to Maturity] / [(Par value+Market Price*2)/3]

Year To Maturity = [761100 + (12900000 - 11997000) / 5] / (12900000 + 2*11997000) / 3

Year to maturity = 7.33%

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Lady_Fox [76]

Branch-circuit conductors supplying a single motor compressor shall have an ampacity not less than 125% of either the motor-compressor rated load current or the branch-circuit selection current, whichever is greater. For a wye-start, delta-run connected motor-compressor, the selection of branch-circuit conductors between the controller and the motor-compressor shall be permitted to be based upon 72% of either the motor-compressor rated-load current or the branch-circuit selection current, whichever is greater.

Explanation:

A branch circuit consists of the conductors between the final over current safety equipment and the exhaust system(s).It consists of drivers between the final over current protection equipment (OCPD) and the receptacle outlets, the illumination outlet(s).

The OCPDs must produce an ampacity of not under 125% of the continuous loads plus 100% of the non-continuous loading.

You must not exceed 125% of the continuous charges, plus 100% of the non-consistent charges

8 0
4 years ago
The risk associated with the unlikelihood that one of the key members will be struck by lightning would most likely be handled b
vova2212 [387]

Answer:

B) Retaining

Explanation:

Retaining risk refers to the risk in which the company could able to take the decision with respect to the responsibility for some particular risk

Here in the given situation it represents that the risk is associated with one of the key members so this presents the responsibility that should be considered while retaining a risk

Hence, the correct option is B.

7 0
3 years ago
A commercial bank will loan you $20,000 for four years to buy a car. The loan must be repaid in 48 equal monthly payments. The a
Lisa [10]

Answer:

Monthly payment = $469.701

Explanation:

<em>Loan Amortization: A loan repayment method structured such that a series of equal periodic installments will be paid for certain number of periods to offset both the loan principal amount and the accrued interest.  </em>

The monthly equal installment is calculated as follows:  

Monthly equal installment= Loan amount/Monthly annuity factor  

Loan amount = 20,000

Monthly annuity factor  =

=( 1-(1+r)^(-n))/r  

r- Monthly interest rate (r)  

= 6/12= 0.5%  

n- Number of months ( n) = 20 × 4 = 48

Annuity factor  

= ( 1- (1.005)^(-48)/0.005= 42.5803

Monthly installment= 20,000 /42.5803  = $469.701

Monthly installment = $469.701

Monthly payment = $469.701

8 0
3 years ago
· Hope's contribution to her RETIREMENT plan...
Verizon [17]

Based on Hope's check, her contribution to her RETIREMENT plan b. is pre-tax and therefore not included in federal income taxes.

<h3>What does the check say?</h3>

The check notes that Hope's retirement contribution is not included in her federal taxable income.

This means that the contribution is paid pre-tax and will not be liable for federal income taxes. She will most probably pay taxes on the retirement fund when she withdraws from it.

Find out more on retirement contributions at brainly.com/question/6806179.

3 0
2 years ago
Bank A quotes a bid rate of $0.300 and an ask rate of $0.305 for the Malaysian ringgit (MYR). Bank B quotes a bid rate of $0.306
Artemon [7]

Answer: $1639.3

Explanation:

From the question, we are informed that Bank A quotes a bid rate of $0.300 and an ask rate of $0.305 for the Malaysian ringgit (MYR) and that bank B quotes a bid rate of $0.306 and an ask rate of $0.310 for the ringgit.

The profit for an investor that has $500,000 available to conduct locational arbitrage goes thus:

Purchasing Malaysian ringgit (MYR) from bank A at the ask rate will be:

= $500,000/$0.305

= 1,639,344.3

Selling the Malaysian ringgit (MYR) at bank B based on the ask rate will be:

= 1,639,344.3 × 0.306

= $501,639.3

The profit for an investor that has $500,000 available to conduct locational arbitrage will be:

= $501,639.3 - $500,000

= $1639.3

5 0
4 years ago
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