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Gre4nikov [31]
2 years ago
9

Issuing a $1,000 par value bond with a yield to maturity of 10%. The company is in a 35 percent marginal tax bracket. What will

be the firm’s after-tax cost of debt on the bond?
Business
1 answer:
san4es73 [151]2 years ago
5 0

Answer:

6.50%

Explanation:

The after-tax cost of the debt is the yield to maturity after having deducted the tax shield which is computed using the formula below:

after-tax cost of debt=pretax cost of debt*(1-tax rate)

pretax cost of debt=yield to maturity=10%

tax rate=35%

The after-tax cost of debt=10%*(1-35%)

The after-tax cost of debt=10%*65%

The after-tax cost of debt=6.50%

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Answer:

The seller transfers title to the buyer once the merchandise is shipped

Explanation:

Free onboard shipping point refers to a practice where the buyer of a product takes responsibility of the good once it is shipped by the seller.

So when the supplier ships a product he can record a sale because the ownership of the good has been shifted to the seller abd he will be paid for services rendered.

The buyer will record an increase in his inventory at this point and make provision for risk of shipping along with shipping cost.

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2 years ago
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3 years ago
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Strike441 [17]

Answer:

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2 years ago
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6 0
2 years ago
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mariarad [96]

Answer:

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Explanation:

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