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seraphim [82]
3 years ago
15

Suppose that the tax on interest income is levied on the nominal interest​ rate, the tax rate is 20 ​percent, and the real inter

est rate is 4 percent a year. There is no inflation.
Calculate the​ after-tax real interest rate and the true tax rate on interest income.
Business
1 answer:
8090 [49]3 years ago
3 0

Answer:

  • After-tax interest rate ⇒ 3.2%
  • True tax on interest income ⇒ 20%

Explanation:

After-tax real interest rate:

= Real interest rate * (1 - tax rate)

= 4% * (1 - 20%)

= 4% * 80%

= 3.2%

True tax on interest income:

= 20%

True tax on interest income is the tax rate levied on the nominal interest rate which is 20%.

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3 years ago
F. in late 2010 hca announced an intended dividend recapitalization in which it would pay a $2 billion dividend to shareholders
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Answer:

The times interest earned ratio will reduce

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Therefore looking at the scenario, if HCA increases its debt level by issuing a $1.53 billion bond, this will increase its interest expense significantly and the number of times its earnings will cover its interest expense will be remarkably lower.

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3 years ago
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Misha Larkins [42]

Answer:

B. $165,000

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Partially unsecured Liability = $25,000 ($125,000 - 100,000)

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Total = $165,000

Explanation:

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b) The partially secured liability of $125,000 could only be secured with assets worth $100,000, leaving the balance of $25,000 as unsecured.

c) The Unsecured with priority equals $20,000

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