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aalyn [17]
3 years ago
13

5 years ago, Barton Industries issued 25-year noncallable, semiannual bonds with a $1,000 face value and an 8% coupon, semiannua

l payment ($40 payment every 6 months). The bonds currently sell for $894.87. If the firm's marginal tax rate is 25%, what is the firm's after-tax cost of debt
Business
2 answers:
Reika [66]3 years ago
7 0

Answer:

Firms after tax of debt is 6.87%

Explanation:

Firm's after-tax cost of debt is calculated using the RATE function as follow:-

=RATE(nper,pmt,pv,fv)*(1-tax rate)

=(RATE(20*2,40,-894.87,1000)*2)*(1-25%)

=6.87%

Alexus [3.1K]3 years ago
5 0

Answer:

9%

Explanation:

The cost of debt is the yield to maturity of the bond. Yield to maturity is the annual rate of return that an investor receives if a bond bond is held until the maturity. it is long term return which is expressed in annual rate.

Number of payment = n = 40 payments

Coupon Payment = $1,000 x 8% /2 = $40

Yield to maturity = [ C + ( F - P ) / n ] / [ (F + P ) / 2 ]

Yield to maturity = [ $40 + ( $1,000 - $894.87) / 40 ] / [ ($1,000 + $894.87) / 2 ] = 0.045

Yield to maturity = 4.5% semiannually = 9% annually

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4 years ago
Assume a firm is currently operating at 98 percent of capacity with sales of $28,400. Next year, sales are projected to increase
Lana71 [14]

Answer:

$3,511

Explanation:

The given data:

Current year: operating at 98 percent with sales $28,400

Forecast of next year: sales = $35,000

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4 0
3 years ago
Balance of payments accounts are the accounts in which a nation records its​ _____.
Kryger [21]

Answer:

Explanation:

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A country's balance of payments and its net international investment position together constitute its international accounts.

The balance of payments divides transactions in two accounts: the current account and the capital account. Sometimes the capital account is called the financial account, with a separate, usually very small, capital account listed separately. The current account includes transactions in goods, services, investment income and current transfers. The capital account, broadly defined, includes transactions in financial instruments and central bank reserves. Narrowly defined, it includes only transactions in financial instruments. The current account is included in calculations of national output, while the capital account is not.

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Consider some determinants of the price elasticity of demand: The availability of close substitutes Product's share of the consu
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The main factors influencing a commodity's price elasticity of demand are as follows: 1. The presence of substitutes 2. The sum of consumer spending 3. The Products' Complementarity.

The main factors influencing a commodity's price elasticity of demand are as follows: 1. The presence of substitutes 2. The sum of consumer spending 3. A product's number of applications 4. The Products' Complementarity 5. Time and elasticity. The most important factor influencing price elasticity of demand is the availability of diverse kinds and quantities of substitutes for a particular commodity or service. If a commodity has close substitutes, its demand is probably elastic. The demand for such an item will be greatly diminished if its price rises because consumers will switch to similar substitutes.

With increasing substitutability, something's price elasticity of demand rises.

To know more about consumer click here:

brainly.com/question/27773546

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aliens are the best do you agree

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