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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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Find the future values of these ordinary annuities. Compounding occurs once a year. Round your answers to the nearest cent. $200
PIT_PIT [208]

Answer:

Normal:

$ 3,509.7470

$    563.7093

$ 2,000.00

Due:    

 $3,930.9167

 $   597.5319

 $ 2,000.00

Explanation:

We solve using the formula for common annuity and annuity-due on each case:

C \times \frac{(1+r)^{time} }{rate} = FV\\

C \times \frac{(1+r)^{time} }{rate}(1+rate) = FV\\ (annuity-due)

<u>First:</u>

C 200.00

time 10

rate 0.12

200 \times \frac{11+0.12)^{10} }{0.12} = FV\\

200 \times \frac{11+0.12)^{10} }{0.12}(1+0.12) = FV\\

Normal:  $3,509.7470

Due:       $3,930.9167

<u>Second:</u>

100 \times \frac{(1+0.06)^{5} }{0.06} = FV\\

100 \times \frac{(1+0.06)^{5} }{0.06} (1+0.06)= FV\\

$563.7093

$597.5319

<u>Third:</u>

No interest so no time value of money the future value is the same as the sum of the receipts regardless of time or being paid at the beginning or ending.

1,000  + 1,000 = 2,000

4 0
3 years ago
Auditing :How to distinguish between test of control and substantive test
Alenkinab [10]
Test of controls is when you test controls surrounding a financial process . Substantive test are performed when one tests assertions surrounding a balance.
8 0
3 years ago
Would you rather have a job you hate that pays $120,000 or a job you love that pays $40,000? Why?
Lena [83]

Answer:

a job i hate becasue they pay well

Explanation:

3 0
2 years ago
What work-related tasks do you think would be appropriate to be delivered electronically, and what types do you feel would be be
Mandarinka [93]

Answer:

What I feel would be appropriate to be delivered electronically:

- Sending Daily report

- Requesting invoice for petty cash

- Working schedule

- Creating list of tasks.

I think every activities that does not necessarily need a lot of human communication should be delivered electronically . it just safe a lot of time and make it accessible anywhere you want.

What i feel would be better delivered in traditional setting:

- Brainstorming

- Firing people

I believe group brainstorming will be more efficient if team members spare their time to gather together in a private setting and focus on doing so. Doing it electronically will make it hard to communicate and some team members might not focusing on the task.

Firing people also should be done face-to-face. Even though this person is about to be kicked out of the team, we need to know that we appreciate what they've done to the team. Firing using electronic media just seems cold and impersonal.

5 0
3 years ago
The result of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions was to:____
postnew [5]

Answer: d. Make bribery of foreign officials a criminal offense but not consider facilitating payments a criminal offense.

Explanation:

In December 1997, signatories accounting for around 70% of World Trade adopted the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions which stated that countries must install Legislative laws that would prohibit the bribing of foreign officials as well as strict penalties for parties who engage in such. This was done to ensure that the playing field was level so to speak instead of one company getting special treatment because they paid for it.

One concern however was that the Convention did not consider Facilitating Payments a criminal offence which means that it could be used as a bypass for the bribery of foreign officials to still happen.  

8 0
3 years ago
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