Answer:
I think the answer is $1,500.
Explanation:
I hope this helps. If the answer is wrong then sorry and you don't have to give me the points. In here I think I did the calculation wrong.
Given that <span>Arlo
is offered a job in des moines, where the cpi is 80, and a job in new
york, where the cpi is 125. arlo's job offer in des moines is for
$42,000.
Let the amount the new york job will pay be x, then
Therefore, the new york job have to pay him $65,625 in order for the two
salaries to represent the same purchasing power.</span>
Answer:
After tax cost of debt is 8.82%
Explanation:
Given:
Assume coupon payments are made annually.
Face value (assumed) (FV) = $1,000
coupon rate = 10% or 0.1
Coupon payment (PMT) = $100
Maturity period (nper) = 30
Flotation cost = 0.05×1000 = $50
Discount = 0.05×1000 = $50
Price of debt = Face value - Discount - Flotation cost
= $1000 - 50 - 50
= $900
Calculate rate using spreadsheet function =rate(nper,pmt,PV,FV)
Rate or YTM(yield to maturity) is 11.17%
Tax rate = 21% or 0.21
After tax cost of debt = 0.1117 (1 - 0.21)
= 0.0882 or 8.82%