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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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dsp73

The Ohio state studies and the leadership grid are associated with the behavioral approach to leadership.

<h3>What is meant by the behavioral approach?</h3>

Since human conduct is taught, it is possible to unlearn any behavior and replace it with another behavior. The observable and quantifiable characteristics of human behavior are the main focus of behaviorism. As a result, learnt behaviors can be undone when they become unacceptable.

Relationship behaviors aid followers in feeling at ease with one another, with themselves, and with their surroundings. The behavioral approach's main goal is to clarify how leaders mix these two types of actions to affect followers' efforts to accomplish a goal.

According to the behavior approach, all behaviors are acquired and are predicated on the same core precepts and outcomes.

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4 0
2 years ago
Barnes Books allows for possible bad debts. On May 7, Barnes writes off a customer account of $5,300. On September 9, the custom
Andreyy89

Answer:

The cash collection on September 9 is records by the entry:

Debit Cash $5,300

Credit Accounts Receivable $5,300

Explanation:

Barnes Books allows for possible bad debts. On May 7, the company writes off a customer account. The journal entry:

Debit Allowance for Doubtful Accounts $5,300

Credit Accounts Receivable $5,300

On September 9, the customer unexpectedly pays the $5,300 balance. The journal entries:

1. Debit Accounts Receivable $5,300

Credit Allowance for Doubtful Accounts $5,300

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3 0
3 years ago
Understanding the Resource Allocation Process (RAP) will have large effects on shaping a firm'srealized strategy. Which of the f
vfiekz [6]

Answer:

The correct answer is D Intel's rule to "maximize margin-per-wafer-start"

Explanation:

4 0
3 years ago
, suppose the book value of the debt issue is $70 million. In addition, the company has a second debt issue on the market, a zer
vlada-n [284]

Answer: See explanation

Explanation:

a. The company's total book value of debt will be:

= Value of debt + Value of zero coupon bonds

= $70 million + $100 million

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= (1 - 35%) × 5.7%

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5 0
2 years ago
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Answer: Coca-cola

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Coca-cola has also been differentiated over the years by introducing various flavors that are meant to appeal to different segments in the market such as  Diet Coke, Coca-Cola Zero Sugar, Coca-Cola Cherry and Coca-Cola Vanilla.

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