Answer:
$600
Explanation:
Calculation to determine how much will you save in taxes for the current year
Using this formula
Tax savings = Tax rate × Tax deduction
Let plug in the formula
Tax savings= 0.24 × $2500
Tax savings =$600
Therefore how much will you save in taxes for the current year is $600
Answer: Fee simple defeasible.
Explanation:
A fee simple defeasible is a transfer of property that has conditions placed on the property. The holder of a fee simple defeasible has the property as a "fee simple" subject to the given condition. In a case whereby the condition is not met or violated then the property will go back to the grantor or a specified third party.
In this case, if the first church of Magnolia allows alcohol to be sold on the land, the property will be given back to Kasen or his heirs.
Answer:
- Stock is overpriced/ overvalued.
- Sell if you own it.
- Don't buy if you don't.
Explanation:
Use CAPM to find the required return on the stock:
Required return = Risk free rate + beta * ( Market return - risk free rate)
= 2.5% + 1.3 * (7% - 2.5%)
= 8.35%
Price based on Constant Dividend Growth Model (CDGM):
Price = Next dividend / (Required return - growth rate)
Next dividend = 1.40 * ( 1 + 4%)
= $1.456
Price = 1.456 / (8.35% - 4%)
= $33.47
<em>Stock is selling for $35. It is overvalued. Don't buy the stock. Sell if you have the stock. </em>
Answer:
The price as a percentage of the treasury stock is 104.23%
The price as a percentage of the BBB-rated corporate bond is 98.37%
The credit spread on the bond is 1.40%
Find detailed computations in the attached.
Explanation:
The credit spread on BBB-rated corporate bond is the difference between its effective interest rate and the interest rate on the U.S government treasury security,that is:
7.7%-6.3%=1.40%
Note that the par value of a bond is usually $1000.
