Answer:
the annual pre-tax cost of debt is 10.56%
Explanation:
the beore-tax component cost of debt will be the actual market rate of the bonds, as they offer an interest rate of 11% but are selling at 104 points not at par thus, there is a difference between the rates.
We solve for the rate which makes the coupon and maturity 104
with excel or a financial calculator
PV of the coupon payment
C 5.500 (100 x 11%/2)
time 60 (30 years x 2 payment per year)
rate <em>0.052787474</em>
PV $99.4338
PV of the maturity
Maturity 100.00
time 60.00
rate <em>0.052787474</em>
PV 4.57
<em><u>Adding both we should get 104 which is the amount the bonds is selling:</u></em>
PV coupon $99.4338 + PV maturity $4.5662 = $104.0000
The rate is generated using goal seek or wiht a financial calculator.
This rate is a semiannual rate, so we multiply by 2 to get the annual cost of debt:
0.052787474 x 2 = 0.105574947
The cost of debt for the firm is 10.56%
A.are a good source of referrals.
1. What is the variable overhead spending variance? (HINT: The answer $980 unfavorable, but I need work to support this)
2. What is the variable overhead efficiency variance? (HINT: The answer is $4,040 unfavorable, but I need work to support this)
Answer:
Option (a) is correct.
Explanation:
Given that,
Operating income = $68,200
Interest expense = $210
Dividends paid = $320
Depreciation = $12,400
Other income = $2,100
common stock = $48,500 with a par value of $1 per share
Retained earnings = $29,700
Income before taxes:
= Operating income - Interest expense + Other income
= $68,200 - $210 + $2,100
= $70,090
Net income:
= Income before taxes - Taxes at 21%
= $70,090 - ($70,090 × 21%)
= $70,090 - $14,719
= $55,371
Shares of common stock outstanding:
= Common stock ÷ Par value per share
= $48,500 ÷ $1
= 48,500 shares
Earnings per share:
= (Net income - Preferred dividend) ÷ Shares of common stock outstanding = ($55,371 - 0) ÷ 48,500
= $1.14 per share
Therefore, the earnings per share if the tax rate is 21 percent is $1.14.
Answer:
Res ipsa loquitur
Explanation:
_____ is a tort in which the presumption of negligence arises because the defendant was in exclusive control of the situation, and the plaintiff would not have suffered injury but for someone's negligence.
Res ipsa loquitur is a doctrine in law that one can presume the negligence of a defendant when the facts are glaring.The doctrine has primarily required that a defendant have exclusive power over the occurrence of an injury. negligence could result from
1. an actual causal connection between the defendant's conduct and the resulting harm; 2 a duty of care owed by the defendant to the plaintiff; 3 a breach of that duty;
