Answer: a. Railroad loading
Explanation:
This question relates to the BCG matrix which allows a company with multiple divisions to know how to deal with its various divisions based on their growth rate and market share.
The question specifically relates to a matrix called "Cash cows". Cash cows are divisions that have a significant market share but a low growth rate. These divisions are stable and bring more money into the company than they cost to run.
This allows us to take profits from them and invest in other. The Railroad loading controls a significant market share of 75% but has a low growth rate so is a Cash cow.
Income taxes, payroll taxes, and corporate income taxes
Answer: After-tax cost of debt is 7.8%.
Explanation:
Given that,
coupon = 10% (outstanding bonds)
yield to maturity (YTM) = 12%
marginal tax rate = 35%
The after-tax cost of debt:
After-tax cost of debt = YTM (1 - Tax rate)
= 12% (1 - 0.35)
= 0.12 (0.65)
= 0.078
= 7.8%
YTM is used in the after-tax calculation because it represents the true pre-tax cost of debt to the issuer.
Therefore, the after-tax cost of debt is 7.8%
Answer:
$34,600
Explanation:
The computation of beginning retained earnings balance is seen below:
But we know that;
Ending balance of retained earnings = Beginning balance of retained earnings + Net income - Dividend paid
$51,600 = Beginning retained earnings + $21,100 - $4,100
Beginning retained earnings = $51,600 - $21,100 + $4,100
Beginning retained earnings = $34,600
