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Tom [10]
3 years ago
13

Check my work Check My Work button is now disabledItem 5Item 5 6 points The aftertax cost of debt: Multiple Choice varies invers

ely to changes in market interest rates. will generally exceed the cost of equity if the relevant tax rate is zero. will generally equal the cost of preferred if the tax rate is zero. is unaffected by changes in the market rate of interest. is highly dependent upon a company's tax rate.
Business
1 answer:
DaniilM [7]3 years ago
7 0

Answer: is highly dependent upon a company's tax rate.

Explanation:

The after-tax cost of debt is defined as the net cost of debt that is determined by adjusting the gross cost of debt incurred for its tax benefits. The after-tax cost of debt

equals the pre-tax cost of debt which is then multiplied by (1 – tax rate).

The after-tax cost of debt is the cost of debt which is included while calculating the weighted average cost of capital and it has a greater effect on the cost of capital of a firm when there's an increase in the debt-equity ratio.

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The fixed exchange rate system was used until 1971.<br><br> Question 3 options:<br> True<br> False
umka21 [38]

<u>Answer:</u>

<em>True </em>

<em></em>

<u>Explanation:</u>

The exchange rate is a system applied to a government or national bank ties the nation's monetary authority conversion standard to another nation's cash or the cost of gold.

At the point when America after war parity of installments surplus went to a shortfall during the 1950s and 1960s, the periodic conversion scale modifications allowed under the understanding eventually demonstrated lacking. In 1973, President Richard Nixon expelled the United States from the best quality level, introducing the time of coasting rates.

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4 years ago
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What financial behaviors will typically lead to a low credit score?
Umnica [9.8K]
Not paying your credit card bills on time
7 0
4 years ago
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Suppose you play a game where you toss three fair coins. If you get three tails, you win $10. Otherwise, you lose $2. If you wer
Bingel [31]

Answer: The chances of occurrence of tail when we toss the coin is 50% which can be explained by the following formula:

Probability = Number of favorable events / # of Total event

Here the number of Total events = 2^3 =8

Number of total events can also be found by following Way:

1. Head, Head, Head

2. Head, Head, Tail

3. Head, Tail, Tail

4. Tail, Tail, Tail

5. Tail, Tail, Head

6. Tail, Head, Head

7. Head, Tail, Head

8. Tail, Head, Tail

This implies

Number of favorable events = 1 & Number of Total events = 8

By putting values:

Probability = 1 / 8 = 12.5%

So the chances of winning $10 is 12.5% whereas loosing $2 is 87.5%.

5 0
3 years ago
In 2008, 1 in approximately every 200 cars in the United States was stolen. Beth owns a car worth $20,000 and is considering pur
rjkz [21]

Answer:

A) The amount of the premium in fair insurance policy that replaces Beths car, must be equal to the probability or expectation of claim of car theft.

Therefore, the Premium amount = 20000 x (1/200)

= 20000 (0.005)

= $100

B) If an Insurance company charges 0.6% for replacing a stolen car, then the policy will cost beth:

20000* 0.6%

= 12,000/100

= $ 120  

C) To be risk-neutral means to be indifferent to the risk. This means that Beth would be indifferent. She most likely will be focused on maximizing value for money. In other words, she will NOT pay for the insurance policy in part b because part A provides her with the exact (or fair) premium for her insurance.

D) The moral hazard problem is this, people tend to become more careless with an insurance policy in place. This moral hazard arises form the knowledge that there is an insurance policy that caters to their risks.

As a matter of practice, therefore, insurance companies factor this increased risk into their premiums. Where the premium was supposed to be $100, they may charge $120.

In summary, it means that Beth most likely will move from becoming risk neutral to becoming (to a certain degree) more risk loving.

Cheers!

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3 years ago
Which of the following describes the process of inspiring, influencing, and guiding employees to participate in accomplishing co
jeyben [28]

human resource development

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