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Neporo4naja [7]
3 years ago
7

Jiminy’s Cricket Farm issued a 30-year, 6 percent semiannual bond three years ago. The bond currently sells for 93 percent of it

s face value. The company’s tax rate is 22 percent. a. What is the pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Business
1 answer:
wlad13 [49]3 years ago
6 0

Answer:

a. What is the pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

  • 6.46%

b. What is the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

  • 5.04%

Explanation:

we must first determine the bond's yield to maturity:

YTM = {coupon + [(face value - market value)/n]} / [(face value + market value)/2] = {30 + [(1,000 - 930)/60]} / [(1,000 + 930)/2] = 31.17 / 965 = 3.23% x 2 = 6.46%

after tax cost of debt = 6.46% x (1 - tax rate) = 6.46% x (1 - 22%) = 6.46% x 78% = 5.04%

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Answer:

Paul is not maximizing his utility because MUd/Pd is greater than MUb/Pb

Explanation:

Marginal utility is the extra satisfaction derived from spending an additional unit of money on consuming a particular product or service.

In order to determine if he is maximizing his utility, we must calculate his utility per dollar, and this is done by dividing his Marginal Utility by the price.

Marginal Utility per dollar of DVDs is:

MUd/Pd = 23/11 = 2.09

Marginal Utility per dollar of books is:

MUb/Pb = 5/3 = 1.67

Utility is maximized when MUd/Pd is equal to MUb/Pb and Paul has exhausted his budget.

4 0
3 years ago
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Ira Lisetskai [31]

Answer:

The correct answer is A. Generally small and influenced by other factors

Explanation:

Flexibility in this case refers to the development of more dynamic tasks without taking into account time, and is presented as the way in which employees get on with other tasks in order to learn new things. Job satisfaction is distinguished by aspects of their tasks, where the level of growth is perceived under static working conditions.

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2 years ago
In the context of analyzing the health, activities, and performance of a business, which of the following is a nonfinancial meth
Solnce55 [7]

3. Short surveys

Explanation:

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The 3rd option is given as Short surveys which is a non-financial method of analysis.

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weqwewe [10]

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E. All of the steps above are appropriate to take if she suspects identity theft.

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