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miskamm [114]
2 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]2 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%

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3 years ago
Kenya performs research and creates reports for her boss, the company's Chief Executive, Kenya's job title is best
CaHeK987 [17]

Answer:

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The administrative assistants, receptionists, and file clerks perform important functions.  In their various capacities and roles, they help their bosses to function more efficiently and effectively by relieving them of routine tasks.  As they perform these duties, their bosses are enabled to concentrate their efforts and time in managing their assigned responsibilities.  However, these job titles are not universally uniform, as it depends on the organization.

4 0
3 years ago
Jane decided to incorporate her business under the name of Star, Inc. Before Star was incorporated, Jane signed a contract with
BARSIC [14]

Answer:

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7 0
2 years ago
Concord Corporation has gathered the following information concerning one model of shoe: Variable manufacturing costs $30000 Var
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Answer:

Option (c) is correct.

Explanation:

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3 0
3 years ago
Vijay Inc. purchased a three-acre tract of land for a building site for $260,000. On the land was a building with an appraised v
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Answer:

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