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UNO [17]
2 years ago
12

The 10-year bond of Crown Electronics is selling at $960 each. The bond has a coupon rate of 8% and par value of $1,000. The fir

m will incur a $20 flotation cost for each bond issued. If the firm's tax rate is 40%, what is the after tax-cost of the firm's debt
Business
1 answer:
stich3 [128]2 years ago
6 0

Answer: 5.36%

Explanation:

The after-tax cost of debt refers to the interest that is paid on debt which is then less the income tax savings as a result of the deductible interest expenses.

When calculating the after-tax cost of debt, the effective tax rate of a company should be subtracted from 1, after which the difference will be multiplied by the cost of debt. This will therefore be:

= Rate (10,8% × 1000, -960 + 20, 1000) × (1-40%)

=5.36%

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[5] According to the FASB’s conceptual framework, which of the following best describes the distinction between expenses and los
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The expenses represent the cash outlow or liabilities taken to carry out the activities to continue his operations.

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<u>c. Credence attributes</u>

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The factors that affect the level of wages are skills and abilities, the size of the labor pool, and the actions of labor unions. therefore, these options are correct statements.

<h3>How do you determine the level of wages?</h3>

Wages are decided through supply and demand, however, they may be stimulated through a huge form of factors, inclusive of the fee of living in a specific area, the presence of a union, and the modern-day minimal wage.

Pay prices additionally range through gender, race, training degree, and talent degree of the workforce.

Thus, the correct options are skills and abilities, the size of the labor pool, and the actions of labor unions.

Learn more about the level of wages here:

brainly.com/question/1142533

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