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HACTEHA [7]
3 years ago
12

Hi Tech Products has 35,000 bonds outstanding that are currently quoted at 102.3. The bonds mature in 11 years and carry a 9 per

cent annual coupon.
What is the firm’s after-tax cost of debt if the applicable tax rate is 35%?

A) 4.47% B) 4.79% C) 5.63% D) 5.98% E) 6.31%
Business
1 answer:
vladimir1956 [14]3 years ago
7 0

Answer:

C) 5.63%

Explanation:

First we have to find the pretax cost of debt of the firm in order to find it's after tax cost of debt.

We know the price of the bond is $102.3, its future value or par value is $100, the  number of periods are 11 as it is annual coupon bond with a maturity of 11 years and the coupon payment each year is (0.09*100)= $9. We can input these values in a financial calculator to find the bonds ytm or cost of debt.

PV= 102.3

FV= -100

PMT=-9

N= 11

Compute I = 8.66

The pretax cost of debt is 8.66%

Now in order to calculate the after tax cost of debt we will use the formula

Pretax cost of debt *(1-tax rate)

=0.0866*(1-0.35)=0.05629= 5.629% rounded of to 5.63%

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Answer:

DeShawn not take offer engine detailing service

Explanation:

given data

cost = $40

charges = $75

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additional charges = $20

to find out

Should DeShawn continue offer

solution

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marginal benefit = total price - charges

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8 0
3 years ago
On November 15, 2018, X Corp., an accrual basis taxpayer, enters into a contract which will provide the corporation with the use
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Answer: $20000

Explanation:

Since $100,000 is paid for the contract which will provide the use of manufacturing equipment for 5 years, the payment that can be deducted for each of the 5 years will be an equal payment.

Therefore, the payment that X Corp. can deduct in 2018 will be:

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6 0
3 years ago
Bramble Corp. purchased land as a factory site for $1305000. Bramble paid $121000 to tear down two buildings on the land. Salvag
AURORKA [14]

Answer:

Part 1

$1,422,940

Part 2

$331,480

Explanation:

cost of the land calculation

Purchase Price                             $1305000

Cost to tear down building             $121000

Sale of Salvages                               ($8400)

Leagl fees                                           $5340

Total                                            $1,422,940

The cost of the land that should be recorded by Wilson Co. is: $1,422,940

cost of the building calculation

Architect's fees               $47000

Insurance                          $3900

Liability insurance            $4200

Excavation cost               $15480

city for pavement             $9900

Borrowing Costs           $251000

Total                              $331,480

The cost of the building should be recorded by Wilson Co. is $331,480

4 0
3 years ago
Which of the following is NOT one of the responsibilities of the Federal Reserve?
defon
The Board of Governors, also known as the Federal Reserve Board, is the national component of the Federal Reserve System. The board consists of the seven governors, appointed by the president and confirmed by the Senate. Governors serve 14-year, staggered terms to ensure stability and continuity over time. The chairman and vice-chairman are appointed to four-year terms and may be reappointed subject to term limitations.
 
<span>Among the responsibilities of the Board of Governors are to guide monetary policy action, to analyze domestic and international economic and financial conditions, and to lead committees that study current issues, such as consumer banking laws and electronic commerce.hope this helped! :)</span>
8 0
3 years ago
The term "management" refers to the process of getting things done, effectively and efficiently, through and with other people.
galben [10]

Answer:

Management implies a conception and practice regarding power, administration and ways of building consensus and hegemony within an organization or institution. Management is the way to carry out the articulation between the perspectives, through the organizational modes that serve the same and that are consistent with the fines and objectives of the institution.

Explanation:

According to this, the management action crosses the entire institution, in its relationships, in internal coordination, in the ways of establishing work ties, working communities, in the set of options that are adopted when interacting with other institutions It is not just driving or direction. It is the coordination of work processes within the framework of an organization, where roles and tasks are given, which in principle can be articulated generating levels of management.

6 0
3 years ago
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