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
Advocard [28]
3 years ago
15

g Shanken Corp. issued a 30-year, 6.2 percent semiannual bond 7 years ago. The bond currently sells for 108 percent of its face

value. The company’s tax rate is 35 percent. (Assume that the face value of one coupon bond is $1,000.) a. What is the pretax cost of debt? b. What is the aftertax cost of debt? c. Which is more relevant, the pretax or the aftertax cost of debt? Why?
Business
1 answer:
Anna35 [415]3 years ago
7 0

Answer and Explanation:

The computation is shown below:

a. Pre tax cost of debt is

Given that

NPER = 30 - 7 = 23 × 2= 46

PMT =$1,000 × 6.2% ÷ 2 = $31

FV = $1,000

PV = $1000 × 108% = $1,080

The formula is shown below:

= RATE(NPER,PMT,-PV,FV,TYPE) ×  2

AFter applying the above formula, the rate is 5.58%

b. The after tax cost of debt is

= 5.58% × (1 - 0.35)

= 3.63%

c. The after tax cost of debt would be considered more relevant

You might be interested in
14.Outline four features that constitutes a market <br>​
ICE Princess25 [194]

Answer:

as

Explanation:

8 0
2 years ago
Which one of the following would probably benefit the most from personal financial planning services?
BartSMP [9]
The answer is B)<span> Older persons nearing retirement and needing to know what their income will most likely be during retirement

Option D, would be wrong since without the means to have a financial planning assistant would not really be able to achieve much aside from probably saving some more money.

However, older people who are nearing retirement are probably at the top of their careers and have a lot of savings in cash, bongs, stocks and maybe even property.

It is these kinds of people who can get maximum benefit from proper financial planning.
</span>
4 0
3 years ago
Read 2 more answers
According to the principle of comparative advantage, Group of answer choices countries should specialize in the production of go
Vanyuwa [196]

Answer:

should specialize in the production of goods for which they have a lower opportunity cost of production than their trading partners

Explanation:

A country has comparative advantage in production if it produces at a lower opportunity cost when compared to other countries.

For example, country A produces 10kg of beans and 5kg of rice. Country B produces 5kg of beans and 10kg of rice.  

for country A,  

opportunity cost of producing beans = 5/10 = 0.5

opportunity cost of producing rice = 10/5 = 2

for country B,  

opportunity cost of producing rice = 5/10 = 0.5

opportunity cost of producing beans = 10/5 = 2

Country A has a comparative advantage in the production of beans and country B has a comparative advantage in the production of rice

Country A should specialise in the production of beans and B  should specialise in the production of rice

4 0
2 years ago
Irene invested $27,000 in a twelve-year CD bearing 8.0% interest, but needed to withdraw $6,000 after three years. If the CD’s p
stepladder [879]

$5,040 since Irene earned nearly earned about $4,800 less than what she would be making if she did not make her early withdrawal.

8 0
3 years ago
Read 2 more answers
As part of their marketing strategy, companies will identify a _______, a group of similar people whose interest the company wan
Alina [70]

As part of their marketing strategy, companies will identify a target market, a group of similar people whose interest the company wants to gain.

<h3>What is a target market?</h3>

A target market is a group of customers which could be in the same area that have interest in a particular product.

They are usually identified as the most likely buyers of a product or service.

Therefore, as part of their marketing strategy, companies need to identify a target market, a group of similar people whose.

For more information on target market kindly check

brainly.com/question/24967768

5 0
2 years ago
Other questions:
  • What is the difference between features and benefits?<br><br><br><br> no answers to choose from.
    11·2 answers
  • A licensee using a franchise trade name, or advertising as a member of a cooperative group, must clearly and unmistakably indica
    7·1 answer
  • The classified Balance Sheet will subsection the assets section as follows a. Current Assets and Property, Plant, and Equipment
    15·1 answer
  • The end product of a team effort is often a written report, a series of self-contained electronic slides, and an oral presentati
    7·1 answer
  • Last year, you purchased a stock at a price of $64.00 a share. Over the course of the year, you received $2.20 per share in divi
    7·1 answer
  • Which statement is not true about the self-managed team approach?
    12·1 answer
  • Absorption and Variable Costing Comparisons Red Arrow Blueberries manufactures blueberry jam. Because of bad weather, its bluebe
    15·1 answer
  • 1. What is the main role of financial system?​
    6·1 answer
  • Match the type of teams to the scenario that portrays each of them.
    10·1 answer
  • When might a generic message be appropriate to use? Question 20 options: (ANSWER ASAP PLS)
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!