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3 years ago

Which of the follow is not a common credit card fee

1 answer:

3 0

The option which is not a common credit card fee is D. minimum payment fee. The banks cannot limit how much money you can withdraw just because you paid your credit card fee later than you were supposed to. However, they can give you higher fees for being late, for balance transfer, as well as for yearly membership.

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Cost of Debt KatyDid Clothes has a $150 million (face value) 30-year bond issue selling for 104 percent of par that carries a co

Ivahew [28]

Answer:

the annual pre-tax cost of debt is 10.56%

Explanation:

the beore-tax component cost of debt will be the actual market rate of the bonds, as they offer an interest rate of 11% but are selling at 104 points not at par thus, there is a difference between the rates.

We solve for the rate which makes the coupon and maturity 104

with excel or a financial calculator

PV of the coupon payment

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 5.500 (100 x 11%/2)

time 60 (30 years x 2 payment per year)

rate 0.052787474

$5.5 \times \frac{1-(1+0.0527874736258532)^{-60} }{0.0527874736258532} = PV\\$

PV $99.4338

PV of the maturity

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity 100.00

time 60.00

rate 0.052787474

$\frac{100}{(1 + 0.0527874736258532)^{60} } = PV$

PV 4.57

Adding both we should get 104 which is the amount the bonds is selling:

PV coupon $99.4338 + PV maturity $4.5662 = $104.0000

The rate is generated using goal seek or wiht a financial calculator.

This rate is a semiannual rate, so we multiply by 2 to get the annual cost of debt:

0.052787474 x 2 = 0.105574947

The cost of debt for the firm is 10.56%

5 0

3 years ago

The higher the degree of financial leverage employed by a firm is, the: A. Higher is the number of outstanding shares of stock.

horsena [70]

Answer:

Option B,

The higher the degree of financial leverage employed by a firm, THE HIGHER THE PROBABILITY THAT THE FIRM WILL ENCOUNTER FINANCIAL DISTRESS.

Explanation:

The degree of financial leverage (DFL) is a leverage ratio that measures the sensitivity of a company's earnings per share to fluctuations in it's operating income, as a result of changes in its capital structure.

This ratio indicates that the higher the degree of financial leverage, the more volatile earnings will be.

The use of financial leverage varies greatly by industry and by the business sector. There are many industry sectors in which companies operate with a high degree of financial leverage (examples are retail stores, grocery store, banking institutions, airlines...). Unfortunately, the excessive use of financial leverage by many companies in this sector has played a major role in forcing a lot of them to file for bankruptcy.

Therefore, if the degree of financial leverage employed by a firm is high, then the probability that the firm will encounter financial distress will also be high.

3 0

3 years ago

What Generation expected immigrants to assimilate and become "American" to the extent of expecting to alter their names upon arr

Anna [14]

Probably millennials

3 0

3 years ago

An increase in income is always possible with out increasing expenses. O True False

vaieri [72.5K]

The answer is true because you don’t always have to increase your expenses .

3 0

3 years ago

A stock listing contains the following information: P/E 17.5, closing price 33.10, dividend .80, YTD% chg 3.4, and net chg of -.

Mazyrski [523]

Answer:

B. I and III only

Explanation:

I. The stock price has increased by 3.4% during the current year.

YTD% chg 3.4% means share price change by the rate of 3.4%.

III. The earnings per share are approximately $1.89.

P/E ratio = 17.5

Closing price = $33.10

EPS = $33.10 / 17.5

= $1.89.

Therefore, The correct option is I and III only.

7 0

3 years ago