Answer:
Since the market value equals face value,coupon rate =yield is 75/1000=7.5%
That is 7.5% is before tax cost of floating the bonds
At tax rate of 30%,after tax cost of floating bond =7.5%*(1-30%)=5.25%
However,with a flotation cost of 2%,the before tax cost of flotation is calculated using below formula found in the explanation section.
((75+(1000-980)/25)/(980+1000)*2)=7.66%
Since tax rate remains 30%,the after tax cost of floating the bond with floating cost of 2% is: 7.66%*(1-30%)=5.36%
Explanation:
(Interest payment+((Par value-Net Proceds Value)/number of yr)/(Net Proceds+Par value)/2
Answer:
b. the ncaa clearinghouse
please add options
Mission critical is the answer.
Answer:
1.79%
Explanation:
Calculation to determine the difference in the annual inflation rates for the United States and Poland over this period
Current exchange rate for Polish Zioty = Z 3.91/ US dollars
Expected exchange rate in 3 years for Polish Zioty = Z 3.98/ US Dollars
Now let determine the difference in the annual inflation rates
Annual inflation rates= ( 3.98– 3.91)/ 3.91 x 100
Annual inflation rates= 0.06/3.91x 100
Annual inflation rates=1.79 %
Therefore the difference in the annual inflation rates for the United States and Poland over this period is 1.79%
