Answer:
After tax cost of debt is 4.85%
Explanation:
The starting to computing the after tax cost of debt is to calculate the yield to maturity on the bond .
The yield to maturity on the bond can be computed using the rate formula in excel.
=rate(nper,pmt,-pv,fv)
nper is the time to maturity of 30 years multiplied by 2 since the bond is paying interest on semi-annual basis
pmt is the semi-annual interest receivable by investor which 6.0%/2*$1000=$30
pv is the current market price :$1000*98% =$980 (100-2%),1% deducted for discount,1% for issue cost
fv is the face value of $1000
=rate(60,30,-980,1000)
rate=3.07%
The 3.07% is the semi-annual YTM, whereas the annual YTM 3.07%
*2=6.14%
After tax cost of debt=YTM*(1-0.21)
=6.14%*(1-0.21)
=4.85%
Answer:
$38,265
Explanation:
Beg RE = $29,825
Plus Net Income = $6,540
Minus Dividends = ($2550)
Plus New Stock = $4450
Ending RE = $38,265
Answer: decrease government spending
Explanation:
Since government spending leads to employment generation and business activity which in turn increases incomes and spending. A decrease in government spending will keep demand and consequently inflation in check.
Answer:
Option D
Explanation:
Shop credit cards have similar functions as conventional credit cards. Through the account you make payments that can be paid out over period. Most retailers may provide rewards if you place an order with the credit card, or they can provide bonuses such as extra time back for your next order.
Yeah, in general words. Department stores cards appear to be safer than other unsecured loan cards issued by large credit card providers to just get accepted for. A discount card is not only affecting your ratings but plummeting your credit use. If you file for fresh credit, once the lender takes one of any credit files you usually get slapped with a rough request.
Answer:
10.23%
Explanation:
Calculation for What profit margin would the firm need in order to achieve the 15% ROE, holding everything else constant
First step is to calculate the Net income
.15 = Net income/ 375,000
Net income=.15($375,000)
Net income= $56,250
Now let calculate profit margin using this formula
Profit margin = Net Income/Sales
Let plug in the formula
Profit margin= $56,250/$550,000
Profit margin= 0.1023*100
Profit margin=10.23%
Therefore the profit margin that the firm would need in order to achieve the 15% ROE, holding everything else constant is 10.23%