Answer:
USAco
Export of Videos
The true statement is:
c. USAco cannot take a foreign tax credit because USAco purchases the videos in the United States.
Explanation:
A foreign-source income is income generated from exports of goods and services or arising from the income generated by a U.S. foreign subsidiary. Foreign tax credit is granted to US entities that have foreign subsidiaries to avoid double taxation of the foreign income.
Answer:
The answer is 9.00%
Explanation:
real risk-free rate = 3.00%
average expected future inflation rate = 5.90%
Maturity risk premium = 0.10%
The expected rate of return on a 1 year treasury security would be = the average expected future inflation rate + maturity risk premium + real risk-free rate.
= 3.00% + 5.90% + 0.10%
= 9.00%
Honesty and working hard.
Answer:
The multiple choices are:
a. $1132
b. $1044
c. $ 962
d. $1153
e. $ 988
The correct option is C,$962
Explanation:
The price a rational and prudent investor like me would be willing to pay for the bond today is the present worth of future cash inflows receivable from the bond issuer,which comprises of annual coupon interest and the face value at maturity.
=-pv(rate,nper,pmt,fv)
rate is required rate of return expected by investor of 10%
nper is 5 years since the investor intends to hold the bond for 5 years
pmt is the annual coupon interest=$1000*9%=$90
fv is the face value of $1000
=-pv(10%,5,90,1000)=$962.09
The current price is $962
