1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
n200080 [17]
3 years ago
9

Ladder Works has debt outstanding with a coupon rate of 6 percent and a yield to maturity of 6.8 percent. What is the aftertax c

ost of debt if the tax rate is 21 percent
Business
1 answer:
damaskus [11]3 years ago
8 0

Answer:

5.372%

Explanation:

Given that

Coupon rate = 6 percent

Yield to maturity = 6.8%

Tax rate = 21 percent

So by considering the above information, the after tax cost of debt is

= Yield to maturity × (1 - tax rate)

= 6.8% × (1 - 0.21)

= 5.372%

We simple multiply the yield to maturity with the after tax rate so that the approximate cost of debt could come

Ignored the coupon rate as it is not relevant for the above computation

You might be interested in
South Tel Communications is considering the purchase of a new software management system. The system is called B-lmage, and it i
gavmur [86]

Answer:

Explanation:

South Tel Communications is considering the purchase of a new software management system. The system is called B-image, and it is expected to drastically reduce the amount of time that company technicians spend installing new software. South Tel's technicians currently spend 6,000 hours per year on installation which cost South Tel $25 per hour. The owners of the B-image system claim that their software can reduce time on task by at least 25%. The system requires an initial investment of $55,000 and an additional investment of$10,000 for technician training on the new system. Annual upgrades will cost the firm $15,000 per year. Because the investment is comprised of software, it can be fully expensed in the year of the expenditure (no depreciation). South Tel faces a 30% tax rate and uses a 9% cost of capital to evaluate projects of this type.

A. Assuming that South Tel has sufficient taxable income from other projects so that it can immediately expense the cost of the software, what are the free cash flows for the project for years zero through five?

Total (65,000)

Cash flow year 1 - 5

Saving on installations per year 450,000

Less: Annual upgrades ( 15,000)

Total 435,000

Less: Tax (30%) (130,500);

Total project free cash flow 304,500.answer

4 0
3 years ago
In the month of July (31 days), a company had an available balance in their deposit account of $4,126,000 and service charges of
anygoal [31]

The amount that the company owe the bank in hard dollar fees, after adjustment for earnings credit is:$1081.

<h3>Amount owe after adjustment</h3>

Using this formula

Amount owe=Service charges-(Deposit balance×(1-Reserve requirement)×ECR× Number of days/Number of days in a year)

Let plug in the formula

Amount owe = 2500 - (4126000× (1-.10)×0.45%×31/365)

Amount owe = 2500 - (4126000×.90×0.45%×31/365)

Amount owe=2500-1,419

Amount owe =$1081

Therefore the amount that the company owe the bank in hard dollar fees, after adjustment for earnings credit is:$1081.

Learn more about Amount owe after adjustment here:brainly.com/question/27489236

#SPJ1

8 0
1 year ago
Suppose Kim Ping and Abdel decide to set up a joint venture. Working together, the two companies will build a new, independent m
harina [27]

Answer:

Kim Ping and Abdel will have trouble when it comes to equality in a joint venture. There is always one partner who earns more than the other.

Kim Ping and Abdel will face<em> "conflict of interest." </em>Every individual has his own purpose in making a profit.

Explanation:

"Join venture" refers to the<em> merging of two parties</em>, including their resources, in order to accomplish a project or start a new business. This means that the company profits and losses will be shared by both parties.

However, it is said that "there is no such things as equal partners." There is always a chance that one party will earn more than the other, or the other party will contribute more than the other.

There is also a possibility of "conflict of interest" in such situation. Every partner has his own beliefs and style of running a business. This will cause a conflicting interest in both parties.  

These are the possible problems that Kim Ping and Abdel might encounter.

5 0
3 years ago
According to John Kotter, which of the following actions will adversely influence refreezing efforts?A) the absence of a visionB
dedylja [7]

Answer:

D) declaring victory too soon

Explanation:

John Kotter in this theory of leadership explains the concept and importance of change. He basically believes that the company shall be currently functional.

By the term currently functional he means that the company shall be updated and working on with the current market trend. This means the company shall not be resistant to change and that the management shall take a note of it.

Further in the moving scenario there is no freezing point - the company shall constantly work on the new things which it can improve and excel.

Thus, final confirmation cannot be made soon as towards the change made.

6 0
3 years ago
Help with business pls
ikadub [295]

Answer:

13

Explanation:

35hu292og2j282o2h2geyvevej3u3

4 0
3 years ago
Other questions:
  • On March 31, 2021, Southwest Gas leased equipment from a supplier and agreed to pay $350,000 annually for 15 years beginning Mar
    13·1 answer
  • Which basic objective of direct marketing involves attempting to motivate customers to visit an event or retail outlet?
    14·1 answer
  • Simentec Inc., a tech support company, hasover 150 employees working infive countries. The company allows workers to work from a
    14·1 answer
  • Suppose that consumption is $500 and that the marginal propensity to consume is 0.6. If disposable income increases by $1,000, c
    11·1 answer
  • CHEGG The adjusted trial balance of Bramble Corporation at December 31, 2022 includes the following accounts: Retained Earnings
    15·1 answer
  • The owner of a luxury motor yacht that sails among the 4000 Greek islands charges $450 per person per day if exactly 20 people s
    6·1 answer
  • Generally, State A may exercise "long arm" jurisdiction over a defendant located in State B if the defendant:________. a. once r
    8·1 answer
  • Which is the study of the evolution of behaviors, emphasizing the role of ecological factors as agents of natural selection?
    14·2 answers
  • Under the previous​ CEO, Konica/Minolta's management determined it was time to invest in​ __________ by offering new products to
    15·1 answer
  • The competitive test that a business plan must pass to attract financing from lenders and investors involves proving ________. G
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!