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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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Because of vast differences between different regions, multinational corporations often use ______ departmentalization.
Alexus [3.1K]

Answer:

<u>geographic </u>departmentalization.

Explanation:

It is correct to say that multinational corporations tend to use geographic departmentalization due to the large differences between different regions.

The geographic departmentalization corresponds to a strategy where a company uses a form of structure oriented to a region, that is, it allows the operationalization to be more effective in a region that has greater demand or needs a physical office to better and faster service its customers.

5 0
2 years ago
Teller, a calendar year company, purchased merchandise from TechCom on November 1 of the current year. TechCom accepted Teller's
ikadub [295]

Answer:

Dr Interest Receivable $240

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Explanation:

The reason is that the Techcom company is lender and must account the lending as a loan.

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The interes would be recorded for the two months which is $240 and accounted for as under:

Dr Interest Receivable $240

Cr       Interest Income             $240

And at the end of January 31, Teller will make the payment which would be accounted for as under:

Dr Cash $5260

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4 0
3 years ago
George just got a huge promotion at his workplace and wanted to learn about the tax implications and investment opportunities re
Anton [14]

Answer:

its B

Explanation:

plato user

5 0
2 years ago
Read 2 more answers
In businesses, ________ include the president and other top executives, such as the chief executive officer, chief financial off
CaHeK987 [17]

Answer:

The correct answer is letter "B": Top Managers.

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8 0
3 years ago
What do you think about the 7dream concept for seven- eleven japan? from a supply chain perspective, is it likely to be more suc
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From the supply chain perspective, I think 7dream concept will be more successful in Japan than in USA. The reason being the urban customer of Japanese market and convenient access  for them to store and pick up. For place like USA, where population is sparsely distributed to large area, this supply chain concept will not be very effective. For Suburban population, this model will be very inconvenience as they have to drive a long way to store to collect their deliveries, which they could have easily got home delivered via other such services. 

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