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tekilochka [14]
4 years ago
10

On January 1, 2019, Tonika Company issued a five-year, $10,000, 8% bond. The interest is payable annually each December 31. The

issue price was $9,611 based on an 9% effective interest rate. Tonika uses the effective-interest amortization method. The interest expense on the income statement for the year ended December 31, 2019 is closest to:
Business
1 answer:
Alex777 [14]4 years ago
4 0

Answer:

So book value at the end of December will be $9676

Explanation:

We have given amount of the bond = $10000

Rate of interest = 8 %

So interest paid Interest paid = 10000×0.08 = 800

Issue price = $9611

Effective interest rate = 9 %

Interest expense = 9611×0.09= 865

Discount amortization = 865-800 = 65

Book value at the end of December 31,2019 = 9611+65 = 9676

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Brown Street Grocers has a cost of equity of 11.8 percent, a pre-tax cost of debt of 6.9 percent, and a tax rate of 35 percent.
motikmotik

Answer:

The correct answer to the following question is option E) 9.06% .

Explanation:

Here the cost of equity given is  - 11.8%

Pre tax cost of debt- 6.9%

Tax rate- 35%

So the after tax cost of debt - 6.9% x 65%

= 4.485%

The debt to equity ratio - .6

So the weight of debt - .6 / ( 1 + .06 )

= .375

Weight of equity - 1 / ( 1 + .06 )

= .625

Weighted average cost of capital =

Debts cost x weight of debt + Equity cost x weight of equity

= 4.485 x .375 + 11.8 x .625

= 1.681875 + 7.735

= 9.06%

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3 years ago
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Answer:

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Explanation:

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3 years ago
Alex Carter wanted to invest in the stock market, but didn't have the entire $10,000 he needed to buy the shares of the company
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Invest in stock market would be based on answer d.
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National manufacturer of ball bearings is experimenting with two different processes for producing precision ball bearings. it i
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This example is a Measuring test, this is provided by standard and deviation.
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3 years ago
Here is some price information on Fincorp stock. Suppose first that Fincorp trades in a dealer market. Bid Asked 55.25 55.50 a.
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Answer:

a. Your trade will be executed at the bid price of 55.25.

b. Your trade will be executed at the ask price of 55.50.

Explanation:

First note that:

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The ask price is the lowest price a seller will accept for a security.

Therefore, we have:

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b. Suppose you have submitted an order to sell at market. At what price will your trade be executed? (Round your answer to 2 decimal places.)

Since you are the seller, your trade will be executed at the ask price of 55.50. This is beecausee the ask price is the lowest price uou as a seller will accept for a security.

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3 years ago
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