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padilas [110]
3 years ago
13

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?
Business
1 answer:
Tresset [83]3 years ago
7 0

Answer:

The WACC change if the new tax rate was adopted is - 0.35%

Explanation:

For computing the WACC change, first we have to determine the after tax cost of debt by applying the 40% and 45% tax rate which is shown below:

After tax Cost of debt = Cost of debt × ( 1- tax rate)

For 40% tax rate, it would be

= 7% × ( 1 - 40%)

= 4.2%

For 45% tax rate, it would be

= 7% × ( 1 - 45%)

= 3.85%

The change in WACC would be

= 3.85% - 4.2%

= - 0.35%

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When freelancers sell to publisher the right to use a piece only once, and there is no guarantee that it has not been published
siniylev [52]

Answer:

One time rights.

Explanation:

6 0
2 years ago
In its first year of operations, Wildhorse Co. recognized $33,700 in service revenue, $7,800 of which was on account and still o
ale4655 [162]

Answer:

accrued basis income: 14,300

cash basis income:        9,500

Explanation:

accrued: we reocgnize base on the time of transfer of goods and the expense are mathced when the period they occur.

revenues                   33,700

operating expense <u> (19,400) </u>

  net income             14,300

cash basis: we recognize based on the cash collection or disbursement:

collected from customer     25,900

paid expenses                     (13,600)

insurance paid                  <u>    (2,800)  </u>

           net income                 9,500

4 0
3 years ago
Jennifer received news that she is getting a 5% raise. However, the Bureau of Labor Statistics just reported that prices are ris
Feliz [49]

Answer:

Jennifer is losing purchasing power by 2%.

Explanation:

An increase in prices indicates a decrease in the purchasing power of the consumers. An increase in income means an increase in the purchasing power of the consumers.  

A 5% raise means that Jennifer's income will increase by 5% and so will her purchasing power. But at the same time, a price rise by 7% means that her purchasing power will decrease by 7%.  

This means that overall her purchasing power will decrease by 2%.

4 0
3 years ago
What is the meaning of deplation​
slava [35]

Answer: The meaning of depletion to allocate the cost of extracting natural resources like oil and minerals from the earth.

Explanation:

  • The term depletion is a concept generally we use in tax and accounting.
  • The meaning of depletion is to move the cost of extracting natural resources like oil and minerals from the earth to the income sheets.
  • It is a non-cash expense that lowers the cost value of an asset gradually scheduling charges to the income.
  • To evaluate the depletion per unit we divide the total cost less salvage value by the total number of estimated units.

5 0
3 years ago
True or false: When units produced are less than units sold, net income under absorption costing will be less than net income co
Oliga [24]

Answer:

True

Explanation:

Generally, net income will be the same under absorption costing and variable costing. However, producing fewer units than units sold will decrease the net income under absorption costing. As whatever the variable cost is under the absorption method, fixed manufacturing overhead remains the same that decreases the gross profit and net income. Under the variable costing, the fixed overhead will be calculated as per the units produced. Therefore, the net income will decrease proportionately.

6 0
3 years ago
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