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Yuki888 [10]
3 years ago
5

Jiminy’s Cricket Farm issued a 20-year, 7 percent semiannual coupon bond 4 years ago. The bond currently sells for 104 percent o

f its face value. The company’s tax rate is 23 percent. a. What is the company’s pretax cost of debt?
Business
1 answer:
Lesechka [4]3 years ago
3 0

Answer:

6.64%

Explanation:

The pretax cost of debt is the Yield to Maturity (YTM). Since the coupons are paid semiannually, adjust the duration and the coupon payment amount to semi-annual terms.

You can solve for the YTM using a financial calculator with the following inputs;

Maturity of the bond; N = 20*2 = 40

Face value ; FV = 1000

Semi-annual coupon payment ; PMT = (7%/2)*1000 = 35

Current price of the bond; PV = -1.04*1000 = -1040

Then compute the semiannual interest rate ; CPT I/Y =  3.318%

Therefore, pretax cost of debt; YTM = 3.318 *2 = 6.64%

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Match the following definitons with appropriate options given in below:
Len [333]

Answer:

1. A graphical representation of the relationship between the price of a good and the amount of the good that buyers are willing and able to purchase at various prices.

-Demand Curve

2. The amount of a good that buyers are willing and able to purchase at a given price.

-Quantity Demanded

3. The claim that, other things being equal, the quantity demanded of a good falls when the price of that good rises.

-Law of Demand

4. A table showing the relationship between the price of a good and the amount that buyers are willing and able to purchase at various prices.

-Demand Schedule

Explanation:

5 0
3 years ago
Henkes Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of
Gnoma [55]

Answer:

Estimated manufacturing overhead rate= $30.5 per direct labor hour

Explanation:

Giving the following information:

Direct labor-hours= 79,000 labor-hours.

The estimated variable manufacturing overhead was $11.90 per labor-hour and the estimated total fixed manufacturing overhead was $1,469,400.

To calculate the predetermined manufacturing overhead rate we need to use the following formula:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= (1,469,400/79,000) + 11.9= $30.5 per direct labor hour

3 0
3 years ago
Suppose you inherited $275,000 and invested it at 8.25% per year. How much could you withdraw at the end of each of the next 20
Diano4ka-milaya [45]

Answer:

$28,533.5

Explanation:

Principal value (PV) = $275,000

Time = 20 years

Rate = 8.25%

Present Value = P ((1-(1+R)^-n) / r)

275,000 = P ((1- (1 + 0.0825)^-20) /.0825)

275,000 x .0825 = P (1-(1/1.0825)^20)

22687.5 = P ((1.0825^20 - 1) / (1.0825 ^20))

22687.50 = P (4.8816 - 1 / 4.8816)

22687.5 = P (3.886 / 4.8816)

22687.5 = p(0.7951)

P = 22687.5 / 0.7951

P = $28533.5

6 0
3 years ago
Type the correct answer in the box. Spell all words correcty.
Nookie1986 [14]

Answer and Explanation:

The information management refers to manage the information in effecetive and efficient manner. It could be in terms of storing, organizing, developing, using, distributing the information so that it became useful for the organization

Here, the goal of information management is to identify the requirement of the information for various management levels so that it can be used in appropriate manner.

5 0
3 years ago
Patriot Tools, a company that manufactures industrial tools, incurs higher costs because of its refusal to outsource its manufac
lina2011 [118]

Answer:

The options for this question are the following:

A) economic

B) legal

C) ethical

D) demographic

The correct answer is C) ethical .

Explanation:

Ethical responsibility is the fulfillment of implicit or explicit agreements with respect to what should be the appropriate and respectful conduct in a field or profession. Its purpose is to guarantee the correct performance of those responsible for the actions to be carried out and achieve the well-being of all those involved in said practice.

3 0
3 years ago
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