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
Kaylis [27]
4 years ago
14

Outstanding debt of Home Depot trades with a yield to maturity of ​%. The tax rate of Home Depot is . What is the effective cost

of debt of Home​ Depot?
Business
1 answer:
nydimaria [60]4 years ago
8 0

Answer:

5.6%

Explanation:

A lot of information is missing, so I looked for similar questions to fill in the blanks:

"Outstanding debt of Home Depot trades with a yield to maturity of 8%.

The tax rate of Home Depot is 30%.

What is the effective cost of debt of Home Depot?"

the effective cost of debt or after tax cost of debt = debt's yield to maturity x (1 - tax rate) = 8% x (1 - 30%) = 8% x 0.7 = 5.6%

Interest is tax deductible, therefore, it creates a tax shield that lowers net interest expense.

You might be interested in
Since institutional investors own a large percentage of shares in many corporations they may have the ability to vote large bloc
BARSIC [14]

As a result of Institutional Investors having so many shares, they are able to <u>remove some </u><u>or even </u><u>all </u><u>of the </u><u>members </u><u>of the </u><u>Board</u><u>. </u>

<h3>Who are Board members?</h3>
  • People chosen to represent the shareholders by overseeing the affairs of management.
  • They are voted in by shareholders.

Institutional Investors such as Mutual Funds, own so much stock in companies that their vote can remove board members. With enough influence and voting strategy, they could even remove the entire Board.

Find out more on Board of Directors at brainly.com/question/728335.

8 0
2 years ago
A recent survey found that 60% of all adults over 50 wear sunglasses for driving. in a random sample of 20 adults over 50, what
laila [671]
Mean: 13.8 standard deviation:2.06833266
6 0
4 years ago
A tax of €1.00 per litre on petrol
Anni [7]

Answer:

The correct answer is option a.

Explanation:

If a tax worth €1.00 per liter on petrol is imposed it will create a tax wedge of €1.00 between the price the buyers pay and the price the sellers receive.

A tax wedge can be defined as the deviation from the equilibrium price and equilibrium quantity due to the imposition of taxes.

When a tax is imposed on a product, the consumer and producer both have to share the tax burden. The price paid by the consumers increases and the price received by gets reduced.

The quantity of product gets reduced as well.

3 0
4 years ago
Mint Co.'s cash balance in its balance sheet is $1,300,000, of which $300,000 is identified as a compensating balance. Additiona
Natasha2012 [34]

Answer:

Correct option is B Yes and Yes

Yes - Compensating shall be reported, And Restricted shall also be reported.

Explanation:

Compensating balance is the minimum balance to be maintained in the company's bank account as this is used by bank for offsetting loan, and used by company to set up the loan amount.

Restricted balance is a choice made by the company to not use the funds and use it later for company's growth or future projected, but still since it cannot be used it shall also be reported accordingly.

Therefore the company has the need to report such restricted balance also and compensating balance has to be reported as well.

Therefore correct option is B

Yes - Compensating shall be reported, And Restricted shall also be reported.

7 0
4 years ago
Suppose that the European Union is now experiencing a recession. Its actual real GDP is €200 billion, and the estimate of its po
jek_recluse [69]

Answer and Explanation:

As per the data given in the question,

The central bank have various tools to apply expansionary policy and these tools are :

- Reserve ratio.

- Discount rate.

- Open market operations.

The open market operations include the buying and selling of government owned securities by central bank to impact the monetary base in the economy. In case of any recession, the central bank should purchase government securities to enhance the money supply. Because whenever they do any kind of open market purchase there would definitely be increase in money in the economy. That's why increment in money supply decrease the interest rate in economy.

Nominal interest rate is the cost of borrowing so if there is decrement in interest rate, there would be consumption and investment activities. these both are the component of aggregate demand so the aggregate demand will increase, and this increment in aggregate demand helps the economy to recover in the situation of recession.

6 0
3 years ago
Other questions:
  • Generally, the recomputed adjusted basis of a repossessed residence is determined by the adjusted basis at the time of the _____
    11·1 answer
  • If an interest rate is fixed that means the rate
    12·1 answer
  • When using trial and error to compute the yield to maturity (YTM) for a 6 percent coupon bond that trades at a premium, the proc
    15·2 answers
  • What is the best definition of elasticity in economics? Elasticity of supply measures how the amount of a good changes when the
    8·1 answer
  • Khalil is a network engineer for a bank with branches all over the world. Why would Khalil’s position be very important to his c
    7·1 answer
  • The following information was available for the year ended December 31, 2013:
    7·1 answer
  • The following are the transactions of Spotlighter, Inc., for the month of January:
    13·1 answer
  • Henna Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them throug
    6·1 answer
  • Do you imagine yourself becoming an entrepreneurship and managing your business in the future?
    15·2 answers
  • a lender must provide a consumer with a(n) when the lender owns greater than of the reffered provider or has a personal interest
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!