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katen-ka-za [31]
3 years ago
8

Beckham corporation has semiannual bonds outstanding with 13 years to maturity and the bonds are currently priced at $746.16. if

the bonds have a coupon rate of 8.5 percent, then what is the after-tax cost of debt for beckham if its marginal tax rate is 35%? round your intermediate calculation to two decimal places & final percentage answer to three decimal places. 12.890% 6.250% 8.125% 12.500%
Business
1 answer:
gladu [14]3 years ago
4 0
First of all find YTM: N= 13*2=26PV=  -746.16PMT: 1000*.085= 85/2 = 42.50FV= 1000CPT-- I/Y= 6.25*2 = 12.50
Adjustment of Taxes:12.5/100 = 0.125 x(1-0.35) = 8.125% Ans

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0/1 Question 5 In the country of Mainia, only cranberries and maple syrup are produced. In 2006, 50 units of cranberries are sol
madam [21]

Answer:

A.  Nominal GDP is $2,000, real GDP is $2,000 and GDP deflator is 100.

Explanation:

Nominal GDP is the the total value of goods produced in a country in a given time period and valued at the current market price i.e not adjusted for inflation.

Here to calculate nominal GDP for Mainia in 2006, the total quantity of goods produced in the current year(2006) will be multiply by the current market price.

Cranberries                                               Maple Syrups                 Total

50 units                                                     100 units

<u>$20</u>                                                           <u> $10</u>

$1,000                                                      $1,000                              $2,000

In contrast, Real GDP is measured using the base year price. The reason is to adjust for inflation which might have occurred between the two years.

Here to calculate real GDP for Mainia in 2006, the total quantity of goods produced in the current year (2006) will be multiply by the base year price (2005):

Cranberries                                               Maple Syrups                 Total

50 units                                                     100 units

<u>$10   </u>                                                          <u> $15    </u>

$500                                                          $1,500                             $2,000

GDP deflator measures the movement in value of goods and services produced in the current year in relation to the base year value.

Here is the formula:

GDP deflator = <u>Nominal GDP</u>   x  100

                          Real GDP

GDP deflator = <u>$2,000</u>   x 100

                       $2,000

GDP deflator = 100

7 0
3 years ago
Schuepfer Inc. bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows 2,700 units ar
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Answer:

Total cash disbursement= $40,210

Explanation:

Giving the following information:

The sales budget shows 2,700 units are planned to be sold in March. The variable selling and administrative expense are $3.20 per unit.

The budgeted fixed selling and administrative expense are $35,770 per month, which includes depreciation of $4,200 per month.

Th<u>e depreciation expense is not a cash disbursement. </u>

Total cash disbursement= total variable cost + total fixed cost

Total cash disbursement= 2,700*3.2 + (35,770 - 4,200)

Total cash disbursement= $40,210

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3 years ago
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Rina8888 [55]

Answer:

C. Are readily converted to a known cash amount.

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Answer:

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Read 2 more answers
Fama’s Llamas has a WACC of 9.7 percent. The company’s cost of equity is 12 percent, and its pretax cost of debt is 7.5 percent.
Bezzdna [24]

Answer:

0.4766

Explanation:

Given:

WACC = 9.7%

Company’s cost of equity = 12%

Pretax cost of debt = 7.5%

Tax rate = 35%

Now,

WACC

=  Weight × Cost of equity + (1 - weight) × Pretax cost of debt × (1-tax rate)

or

0.097 = weight × 0.12 + ( 1 - weight ) × 0.075 × (1 - 0.35)

or

0.097 = 0.12 × weight + 0.04875 - 0.04875 × weight

or

0.04825 = 0.07125 × weight

or

weight = 0.6772

also,

weight = \frac{\textup{Equity}}{\textup{Debt + Equity}}

or

\frac{\textup{1}}{\textup{weight}}  = \frac{\textup{Debt+equity}}{\textup{Equity}}

or

\frac{1}{0.6772} = \frac{\textup{Debt}}{\textup{Equity}}  + 1

or

1.4766 = \frac{\textup{Debt}}{\textup{Equity}}  + 1

or

\frac{\textup{Debt}}{\textup{Equity}}  = 0.4766

5 0
3 years ago
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