Answer:
The company's after-tax cost of debt is
Explanation:
Please find the below for detailed calculation and explanations:
The company's after-tax cost of debt is equal to: Bond's yield to maturity (YTM) x ( 1- tax rate). As tax rate is given, we need to calculate the YTM.
Bond's YTM is the discount rate which brings net present value of all cash flows from the bond, which are 15 annual interest payments of $60 each ( $1,000 x 6%) and face value repayment of $1,000 at maturity, equal to its current market price of $1,075. So, it is calculated as below:
( 60/ YTM) x [ 1 - (1+YTM)^-15 ] + 1,000/ (1+YTM)^15 = 1,075 <=> YTM = 5.26%.
=> The company's after-tax cost of debt is equal to: Bond's YTM x ( 1- tax rate) = 5.26% x ( 1 - 32%) = 3.58%.
This is true that RESPA was developed to help buyers understand settlement processes and costs.
<h3>What is RESPA?</h3>
In order to give homebuyers and sellers accurate settlement cost disclosures, the U.S. Congress passed the Real Estate Settlement Procedures Act (RESPA) in 1975. RESPA was also developed in order to limit the usage of company accounts, forbid kickbacks, and remove abusive tactics in the real estate settlement process. The Consumer Financial Protection Bureau is now in charge of enforcing the federal law known as RESPA (CFPB).
Hence, The Real Estate Settlement Procedures Act (RESPA) aims to lower mortgage interest by doing away with referral fees and kickbacks while also improving disclosures of settlement costs to customers.
To know more about RESPA refer to: brainly.com/question/13577082
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Answer: $0 equipment, $20,000 land, $30,000 inventory, $90,000 partnership interest.
Explanation: The asset basis in the partnership between Xena and Xavier is the same same their basis. In the scenario above, Xena's basis is the same as Xena's partnership basis in asset.
Xena's asset basis include;
Cash = $20,000
Land basis = $40,000
Inventory basis = $30,000
Equipment basis = $0
Therefore Xena's basis in the partnership interest :
$(20,000 + 40,000 + 30,000 + 0) = $90,000
Answer:
7.20 %
Explanation:
Debt to income ratio is a measure of an individual's monthly debt repayment ability. The ratio is used in assessing the individual capability of absorbing more debts.
It is calculated by the formula.
Debt to income ratio = Total of Monthly Debt Payments/Gross monthly income x 100.
Total monthly debt is the aggregate or all debts payable on a monthly basis.
Gross income is the income before any deductions.
For Derek, gross income =$5900
Monthly debts =monthly credit card of $425
DTI= $425/ $ 5900 X 100
=0.0720 X 100
=7.20 %
