Answer:
5.71%
Explanation:
The after tax cost of debt=pretax cost of debt*(1-t)
where t is the tax rate of 35% or 0.35
pretax cost of debt=yield to maturity
The yield to maturity can be determined using rate formula in excel as below:
=rate(nper,pmt,-pv,fv)
nper is the number of coupon interest payable by the bonds i.e 12 coupons in 12 years
pmt is the annual coupon=$1000*9.5%=$95
pv is the current market price-flotation cost=$1,100-$48=$1052
fv is the face value of $1000
=rate(12,95,-1052,1000)=8.78%
After tax cost of debt=8.78%
*(1-0.35)=5.71%
Answer:
$5,000
Explanation:
Stockholders Equity Includes the Add-in-capital par value, Add-in-capital excess value of Common and Preferred, Net income accumulated value and dividends.
Ending Stockholders Equity = Beginning Stockholders Equity + Income for the period - Dividend paid During the period
As first year of Operation the value of stockholders equity is considered as $0
Ending Stockholders Equity = $0 + ($60,000 - $33,000) - $22,000
Ending Stockholders Equity = $27,000 - $22,000
Ending Stockholders Equity = $5,000
Answer:
2. If two investments have the same expected return, the investment with the greater risk is preferred.
Explanation:
The statement above is clearly incorrect. If two investment are expected to return the same amount of money to the investor, then, the investor will seek the investment that has a lower risk, because risk, as the meaning of the word implies, is a variable that may impede the realization of the return.
No rational economic agent or investor would choose the riskier investment in this situation.
Names, adresses, phone numbers, and places
I think it can be the "D"
