Suppose an unlevered firm issues $1000 in debt at a cost of debt of 10%. If the corporate tax rate is 20%, $200 t is the change in the firm's value.
Due to the issue of the corporate tax rate is entitled to Interest Tax Shield assuming Debt issued by the firm is perpetual and ignoring financial distress costs
Change in Value of firm
=Net Effect of Debt Financing
=Present Value of Interest Tax Shield (financial distress costs ignored)
= DebtValue * Cost of Debt * Tax Rate Interest Rate
= $1,000 * 10% * 20% 10%
=$200,
corporate tax rate, also known as corporate income tax or corporate tax, is a direct tax levied on the income or capital of a corporation or similar corporation. Many countries impose such taxes at the national level, and similar taxes may be levied at the state or local level.
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If the Moisturizing Black soap shampoo is currently positioned in the product life cycle the stage is called <span>Maturity
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Answer: why did u delete my answer
Explanation:
Answer:
False
Explanation:
A certificate of Deposit or CD is a deposit made into a bank for a specific time. This deposit will earn a fixed interest rate that varies upon the days the deposit is made of. The rule is: Longer the days of the deposit, longer the interest rate paid.
Answer:
D) Rent Expense
Explanation:
As per the principles of accounting we follow the accrual principal, where the expense for a period when accrued is accounted for, even if not paid a liability is created. Here, there is payment of rent for the current month in cash, there is nothing due, it is actually paid, since it is paid only for the current month there is nothing paid in advance that shall be debited to prepaid rent. Therefore, the provided rent paid for the current month will be considered as expense for the period and charged as rent expense.
Thus, correct option is
D) Rent Expense
