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
miskamm [114]
3 years ago
12

Mojo Mining has a bond outstanding that sells for $1,061 and matures in 25 years. The bond pays semiannual coupons and has a cou

pon rate of 6.1 percent. The par value is $1,000. If the company's tax rate is 39 percent, what is the aftertax cost of debt

Business
1 answer:
Reptile [31]3 years ago
8 0

Answer:

3.44%

Explanation:

For computing the after tax cost of debt we need to apply the RATE formula i.e shown in the attachment below:

Provided that,  

Present value = $1,061

Future value or Face value = $1,000  

PMT = 1,000 × 6.1% ÷ 2 = $30.5

NPER = 25 years × 2 = 50 years

The formula is shown below:  

= Rate(NPER;PMT;-PV;FV;type)  

The present value come in negative  

So, after applying the above formula,

1. The pretax cost of debt is 2.82% × 2 = 5.64%

2. And, the after tax cost of debt would be

= Pretax cost of debt × ( 1 - tax rate)

= 5.64% × ( 1 - 0.39)

= 3.44%

You might be interested in
What is a diversionary incentive?
Vinvika [58]

Answer:E- A temptation to start a crisis to create public support at home

Explanation: A diversionary incentive is a term used to describe the various attempts of a foreign country to create crisis in a given country in order to gain support at home.

Diversionary incentive is usually implemented by certain countries for their own selfish gains,they want their own Citizens to focus their minds and interests in crisis outside their own Country,hence lossing focus of the problems bedeviling their own country.

5 0
3 years ago
Schwartz Industry is an industrial company with 100 million shares outstanding and a market capitalization (equity value) of $4
Fudgin [204]
I have to think again about this answer. I will get back! 2.22
6 0
3 years ago
After achieving a result, good managers invest time in reflecting on what went well and what could have gone better. They consid
BartSMP [9]

Answer: d. After each semester, you asked your adviser to review your progress to ensure you remained on track for your anticipated graduation date

Explanation:

Efficiency is measurable and has to do with the ability to achieve a goal or get a result that's desired and avoid wastage of efforts or resources.

With regards to the explanation above, the statement that relate specifically to your efficiency is asking the level adviser to review ones progress in order to show that one is on track.

This shows that the person wants to achieve the goal of graduation and is putting all of his efforts towards that.

3 0
3 years ago
Suppose you purchased a $1,000 face value, 15-year bond one year ago. The bond has a 7.125% (annual) coupon rate - but the bonds
Leya [2.2K]

Answer:

Explanation:

From the question, we have the followed parameters;

The Face value=1,000 United States of America Dollar($); yield to maturity= fifteen(15) years; The bond = 7.125 percent (annual) coupon rate; payment for last year = $974.24.

First thing to do is to calculate the market value after one percent extra= 1%+7.125%= 8.125%

Next, we need to calculate the present value of 14 year coupon of 71.25 USD = 573.00+ 1,000/1+ 0.8125^14

=>573.00+322.15

= 895.15

Therefore, the price of the bond today is $ 895.15.

5 0
3 years ago
A firm is considering purchasing two assets. Asset L will have a useful life of 15 years and cost​ $4 million; it will have inst
Andreyy89

Answer:

D. Asset S has $103,333 more in depreciation per year.

Explanation:

For computing the greater annual straight minus line ​depreciation first we have to determine the each assets depreciation expense which is shown below:

For Asset L

= (Original cost + installation cost - salvage value) ÷ (useful life)

= ($4,000,000 million + $750,000 - $0) ÷ (15 years)

= $316,666.67

For Asset S

= (Original cost + installation cost - salvage value) ÷ (useful life)

= ($2,000,000 million + $500,000 - $400,000) ÷ (5 years)

= $420,000

As we can see that the Asset S has high annual straight-line depreciation

And, the amount exceed is $103,333.33

6 0
3 years ago
Other questions:
  • One way that nike can examine retention of its female consumers is to review their purchases over several timeframes. this is al
    8·1 answer
  • You want to invest in a stock that pays​ $2.00 annual cash dividends for the next four years. At the end of the four​ years, you
    13·1 answer
  • Your career test results revealed you are naturally optimistic and very accepting of other's differing perspectives. you are gen
    8·1 answer
  • Last year, DJ's Soda Fountains, Inc. reported an ROE = 27 percent. The firm's debt ratio was 50 percent, sales were $9 million,
    8·1 answer
  • What can participation in school activities reveal about<br> your self?
    15·1 answer
  • An engineer bought a $1000 bond of an American airline for $875 just after an interest payment had been made. The bond paid a 6%
    9·1 answer
  • Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annua
    14·1 answer
  • An investment that costs $105,000 today is expected to produce the following cash inflows over each of the next five years: $20,
    15·1 answer
  • Describe the customer intimacy and operational excellence related information problems that drove PepsiAmericas to adopt a more
    8·1 answer
  • A well-designed product transcends cultural barriers. It does not need to be changed to suit different countries or cultures. Tr
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!