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
mr Goodwill [35]
2 years ago
11

A corporate bond has a face value of $1,000 and a coupon rate of 5%. The bond matures in 20 years and has a current market price

of $900. If the corporation sells more bonds, it will incur flotation costs of $25 per bond. If the corporate tax rate is 35%, what is the after-tax cost of debt capital
Business
1 answer:
user100 [1]2 years ago
8 0

Answer: 4.10%

Explanation:

Solve for the current rate being used using the RATE function on Excel.

Number of periods = 15

Payment = 1,000 * 5% = 50

Present value = Current market price - floatation costs = 900 - 25 = 875

Future value = 1,000 face value

The result will be:

= 6.31%

If tax is 35%, after-tax cost is:

= 6.31% * (1 - 35%)

= 4.10%

You might be interested in
An investor, such as a bank, may prefer to invest in securities backed by a pool of mortgages purchased in the secondary market
kati45 [8]

Answer:

b. mortgage backed securities diversify credit risk for the investor.

Explanation:

An investor, such as a bank, may prefer to invest in securities backed by a pool of mortgages purchased in the secondary market rather than in an equal dollar amount of mortgage loans because <u>mortgage backed securities diversify credit risk for the investor.</u>

In Mortgage Backed Securities, credit risk is diversified as there are many borrowers and investors between whom credit risk diversifies. So that makes investor such as bank prefer the option.

8 0
3 years ago
What impact did technology have on modern medicine?
Mashutka [201]
Technology today affects every single aspect of modern society. In fact, there isn’t an industry out there that hasn’t been affected by the hi-tech revolution.
Whether we are talking about transportation, communication, security, banking or healthcare, they all rely on technology in one way or another.
But nowhere is this immense impact more apparent than in the field of medicine and healthcare.
Technological breakthroughs are revolutionizing the way healthcare is being delivered.Modern technology has changed the structure and organization of the entire medical field.
From widespread adoption of electronic medical records, to advances in bio-medical engineering and technology, modern healthcare and its delivery methods are changing at an ever increasing rate. But what impact will these changes have on medicine and overall care delivery?
4 0
3 years ago
Suppose that consumer income increases and that ground meat is an inferior good. Which of the following will occur in the market
antoniya [11.8K]

Answer:

d. Market clearing price will fall, and equilibrium quantity will fall.

Explanation:

Inferior goods are those goods which do not behave normally to market.

As with increase in consumer spending capacity, their demand decreases.

Accordingly with decrease in demand , the prices will fall.

Thus, either Statement b is correct or statement d.

Since demand and price both tend to fall, the equilibrium quantity will fall for the same, as the demand will be low, the equilibrium quantity will fall to meet the demand level.

Thus, Statement D is correct.

4 0
3 years ago
SOMEONE PLEASE HELP ME ASAP PLEASE!!!!!​
natka813 [3]

Answer:

A. it will go up

Explanation:

thats the answer

8 0
3 years ago
An author can register his or her copyright application with the _____. International Trade Administration (ITA) International T
Semmy [17]

Answer:

United States copyright office

Explanation:

hope this helps!

6 0
2 years ago
Other questions:
  • Dawnie deposited $350 in a savings account earning 2% interest over 3 years.
    9·2 answers
  • A company determined that the budgeted cost of producing a product is $30 per unit. On June 1, there were 80,000 units on hand,
    6·1 answer
  • To reduce the potential for litigation, the keys to dealing with non-performing employees by health leaders are _____________, c
    15·1 answer
  • The money multiplier process also works in reverse when a loan is repaid and the amount of money that is destroyed is equal to t
    11·1 answer
  • 24. Armin is trying to decide whether to buy a season pass to his college basketball team’s 20 home games this season. The cost
    6·1 answer
  • Kerekes Manufacturing Corporation has prepared the following overhead budget for next month.
    15·1 answer
  • It is estimated that the net cash flows to be received from the copyright will be $63,000, and its fair value is $59,850. The ac
    10·1 answer
  • According to the video, what do Security Guards commonly protect? Select all that apply.
    8·2 answers
  • Bren Co.'s beginning inventory at January 1, 2005 was understated by $26,000, and its ending inventory was overstated by $52,000
    7·1 answer
  • Describe what happens on Pascual's trip to Cuba based on the cues provided. Questions NOTA CULTURAL La Habana Vieja, Cuba, is th
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!