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zhannawk [14.2K]
3 years ago
5

A 7-year municipal bond yields 4.8%. Your marginal tax rate (including state and federal taxes) is 39.00%. What interest rate on

a 7-year corporate bond of equal risk would provide you with the same after-tax return
Business
1 answer:
Vera_Pavlovna [14]3 years ago
8 0

Answer:

The interest rate on corporate bond is 7.87 percent.

Explanation:

The yield on 7-year municipal bond = 4.8%

Given marginal tax rate = 39 percent  

Now calculate the interest rate on 7 year corporate bond that has equal risk.

Use the below formula. Here, yield from both type of bond is equated that is yield from corporate bond and yield from municipal bond because it is given that both gives same return after tax.

Interest rate on corporate bond × (1-tax rate) = Municipal bond yield

Interest rate on corporate bond × (1- 0.39) = 4.8\text{Interest rate on corporate bond} = \frac{4.8}{0.61} = 7.87 \  percent

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Pedro, an administrative manager at Seal Inc., is asked to purchase 100 printers for the firm's office. He contacts a sales repr
Sindrei [870]

Answer:

Retailer

Explanation:

From the question we are informed about Pedro, who was an administrative manager at Seal Inc., is asked to purchase 100 printers for the firm's office. He contacts a sales representative at Metro Distributors Inc. and places an order for 100 printers. Metro Distributors Inc. purchases the printers from Ink Corp., a wholesaler, and delivers them to Pedro at his office. In this scenario, Metro Distributors Inc. is most likely to be Retailer.

A retailer can be regarded as a company or entity which buys products from a manufacturer or wholesaler then sells directly to end users or customers. A retailer can be regarded as an intermediary or middleman, with them the customers can get products from the manufacturers through them. They do this with aim of making profit.

8 0
3 years ago
A stock has an expected return of 12.2 percent, the risk-free rate is 6 percent, and the market risk premium is 10 percent. What
matrenka [14]

Answer:

Beta  = 0.62

Explanation:

<em>The capital pricing model establishes the relationship between expected return from a stock and its systematic  risk . The systematic risk is that which affects all players (businesses and firms) in the entire market, such risks are occassioned by changes in interest rate, exchange rate e.t.c</em>

<em>According to the model , the expected return is computed as follows</em>

E(r)   = Rf  + β(Rm-Rf)

Rf- risk -free rate, Rm-Rf - market premium

  E(r)     = 12.2%,  Rm-Rf  = 10,  β- ?

12.2 = 6%  + β× 10

10β = 12.2 -6

β=  (12.2-6)/10

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3 0
3 years ago
In comparison with a financial statement prepared in conformity with generally accepted accounting principles, a managerial acco
adell [148]

Answer:

Be tailored to the specific needs of an individual decision maker.

Explanation:

A managerial account report is more likely to be tailored to the specific needs of an individual decision maker. This is usually In comparison with a financial statement prepared in conformity with generally accepted accounting principles,

The managerial account lays its focus on specific needs which the decision maker needs.

It doesn't do any of theses;

Focus upon the operating results of the most recently completed accounting period neither does it View the entire organization as the reporting entity.

7 0
3 years ago
Kilbuck manufacturing operates in a lean manufacturing environment. kilbuck's actual conversion costs for the month of may follo
Brums [2.3K]
Kilbuck Manufacturing operates in a lean manufacturing environment. Kilbuck’s actual conversion costs for the month of May follow:
<span><span>Direct and indirect labor $150,000
</span><span>Machine depreciation $85,000
</span><span>Maintenance and supplies $60,000
</span><span>Total conversion costs <span>$295,000
<span>The journal entry to record April's conversion costs will include:
</span>D. A debit to Raw and In Process Inventory

</span></span></span>Raw materials of all kinds are measured at the start<span> recorded into </span>a list plus<span> account with a debit to the raw materials inventory account and a credit to the accounts </span>collectible<span> account.When raw materials </span>are<span> consumed, the accounting treatment varies, </span>betting on<span> their </span>standing<span> as direct or indirect materials.</span>
3 0
3 years ago
The cash account for Stone Systems at July 31, 20Y5, indicated a balance of $17,750. The bank statement indicated a balance of $
omeli [17]

Answer:

The bank reconciliation statement is as shown below:

                                                Amount in $

Balance per bank statement     33,650.00  

Deposit in transit                               9,150.00  

Outstanding check                    (17,865.00)

Bank charges                                   80.00  

Note collected                             (6,095.00)

Returned check                                (540.00)

Check drawn                             <u>   (630.00) </u>

Book balance                             <u> 17,750.00</u><u> </u>

Explanation:

Deposit in transit has been recorded in the books, thus the addition to the bank balance. Bank charges have been deducted from the bank balance but not in the cash book hence it is added back. Note collected is yet to be recognized in the books hence the deduction from the bank balance.

Amount recorded from the check returned is more than the actual by $540 hence the deduction. The check drawn has been over charged by the bank to the tune of $630 hence the deduction.

5 0
3 years ago
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