Answer:
a) $0.5145 million
b) $7.35 million
Explanation:
Given:
Permanent debt outstanding = $35,000,000
Expected marginal tax rate = 21%
a) Suppose they pay an interest of 7% per year on debt. Find the annual interest tax shield.
To find annual interes tax shield use the formula below:
Annual interest tax shield =Total par value of Debt × interest rate × tax rate
= $35,000,000 × 7% × 21%
= $35,000,000 × 0.07 × 0.21
= $514,500
Annual interest tax shield = $0.5145 million
b) What is the present value of the interest tax shield, assuming its risk is the same as the loan?
Use the formula:
Present value of the interest tax shield = Annual interest tax shield /loan interest rate
= $514,500 / 7%
= $7,350,000
present value of the interest tax shield = $7.35 million
Answer:
all are correct (a, b, c, d ,e)
Explanation:
all of the options are possible functions of skeletal muscles
Answer:
n=1.05-1=5%
Explanation:
The nominal interest rate for any project/investment is calculated using the following equation:
1+n=(1+i)(1+r)
Where
n= nominal interest rate= to be calculated
i=inflation rate=1.25% in the given question
r= real interest rate=3.75% in the given question
1+n=(1+i)(1+r)
1+n=(1+1.25%)(1+3.75%)
1+n=1.05
n=1.05-1=5%
Answer: $70
Explanation:
First, we need to calculate the purchase price per share and this will be:
= Purchase amount / Number of shares bought
= $7000 / 140
= $50 per share
Therefore, the balance in the Paid-in Capital, Treasury Stock account on August 2 will be:
= [70 × ($52 - $50)] + [70 × ($49 - $50)]
= (70 × $2) + ($70 × $-1)
= $140 - $70
= $70
Answer:
Jack
Explanation:
He is the one who twisted his ankle. It was not in the restaurant, so the restaurant is not in charge of it.