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garik1379 [7]
3 years ago
9

Cost of debt For which capital component must you make a tax adjustment when calculating the weighted average cost of capital (W

ACC) for a firm? Preferred stock Debt Equity Bedrick Co. can borrow at an interest rate of 12.5% for a period of six years. Its marginal federal-plus-state tax rate is 35%. What is Bedrick's after-tax cost of debt? Bedrick Co. has outstanding 10-year noncallable bonds with a face value of $1,000. These bonds have a current market price of $1,092.79 and an annual coupon rate of 11%. The company faces a tax rate of 35%. If the company wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt? 7.43% 6.19% 5.57% 7.12%
Business
1 answer:
professor190 [17]3 years ago
5 0

Answer:

your dog

Explanation:

because its your dog

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Coache Corporation is considering a capital budgeting project that would require an investment of $120,000 in equipment with a 4
Kaylis [27]

Answer:

a. $44,000

Explanation:

The computation of the total cash flow net of income taxes in year 3 is shown below:

= Incremental sales - annual incremental cash operating expenses - one-time renovation expense - depreciation expense - income tax expense + depreciation expense

= $310,000 - $230,000 - $30,000 - $30,000 - $6,000 + $30,000

= $44,000

Since depreciation is a non-cash expense so it would be added back to the computation part

The depreciation expense would be

= (Original cost - residual value) ÷ (useful life)

= ($120,000 - $0) ÷ (4 years)

= ($120,000) ÷ (4 years)  

= $30,000

And, the income tax expense would be

= (Incremental sales - annual incremental cash operating expenses - one-time renovation expense - depreciation expense) × tax rate

= ($310,000 - $230,000 - $30,000 - $30,000) × 30%

= $20,000  × 30%

= $6,000

6 0
3 years ago
The four types of entrepreneur described by Arthur Cole were the Innovator, the Organization Builder, the Over-Optimistic Promot
devlian [24]

The four types of entrepreneur described by Arthur Cole were the Innovator, the Organization Builder, the Over-Optimistic Promoter, and the Calculating Investor.

Answer is A) Investor.

6 0
3 years ago
Read 2 more answers
Economic integration is an indispensable tool of economic development. Explain five (5) rationale for Nigeria's affinity with th
Sliva [168]

Answer: nice guy

Explanation:hi Mann watsupp

3 0
3 years ago
What is an overdraft? A. Not making deposits frequently enough B. Making purchases at too many different retailers C. Going belo
svp [43]

Answer:

D. Spending more money than you have in your account

Explanation:

An overdraft occurs when money is withdrawn from a bank account and the available balance goes below zero. In this situation the account is said to be "overdrawn".

5 0
3 years ago
Read 2 more answers
Furniture Company manufactures tables. It has two manufacturing departments: Department A and B. The company uses a budgeted ove
motikmotik

Answer:

The total cost of Job A is  $29,044

Explanation:

The computation of the total cost is shown below:

= Direct materials used for Department A + Direct materials used for Department B +  Direct manufacturing labor for Department A + Direct manufacturing labor for Department B + Applied overhead for Department A +  Applied overhead for Department B

where,

Applied overhead for Department A = (Budgeted manufacturing overheads ÷ machine-hours) × Department A machine hours

= ($57,500 ÷ 4,000 machine-hours) × 800 machine-hours

= $11,500

Applied overhead for Department B = (Budgeted manufacturing overheads ÷ Direct labor hours) × Department B Direct labor hours

= ($62,500 ÷ 8,000 Direct labor hours) × 300 Direct labor hours

= $2,344

The other items values would remain the same

Now put these values to the above formula  

So, the value would equal to

= $3,250 + $1,350 + $5,250 + $5,350 + $11,500 + $2,344

= $29,044

8 0
3 years ago
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