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Ket [755]
3 years ago
13

You put money into an account that earns a 5 percent nominal interest rate. The inflation rate is 2 percent, and your marginal t

ax rate is 40 percent. What is your after-tax real rate of interest
Business
1 answer:
spayn [35]3 years ago
4 0

Answer: 1%

Explanation:

The Nominal interest rate has not been adjusted for inflationary effects yet and as such is considered overstated.

The Real Interest rate has been adjusted for inflation and is believed to show the actual return one receives.

Tax is calculated on the Nominal rate.

After tax Nominal Rate = 5% * ( 1 - 40%)

= 3%

Then adjust for inflation to find real rate,

= 3% - 2%

= 1%

The After-tax real rate is 1%.

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Explain 10 reasons why a joint stock company is preferable to a one man's business<br>​
mart [117]

Answer:

Advantages of a Joint Stock Company

One of the biggest drawing factors of a joint stock company is the limited liability of its members. their liability is only limited up to the unpaid amount on their shares. Since their personal wealth is safe, they are encouraged to invest in joint stock companies

The shares of a company are transferable. Also, in the case of a listed public company they can also be sold in the market and be converted to cash. This ease of ownership is an added benefit.

Perpetual succession is another advantage of a joint stock company. The death/retirement/insanity/etc does affect the life of a company. The only liquidation under the Companies Act will shut down a company.

A company hires a board of directors to run all the activities. Very proficient, talented people are elected to the board and this results in effective and efficient management. Also, a company usually has large resources and this allows them to hire the best talent and professionals.

Disadvantages of a Joint Stock Company

One disadvantage of a joint stock company is the complex and lengthy procedure for its formation. This can take up to several weeks and is a costly affair as well.

According to the Companies Act, 2013 all public companies have to provide their financial records and other related documents to the registrar. These documents are then public documents, which any member of the public can access. This leads to a complete lack of secrecy for the company.

And even during its day to day functioning a company has to follow a numerous number of laws, regulations, notifications, etc. It not only takes up time but also reduces the freedom of a company

A company has many stakeholders like the shareholders, the promoters, the board of directors, the employees. the debenture holders etc. All these stakeholders look out for their benefit and it often leads to a conflict of

Explanation:

6 0
3 years ago
Unit Test
ad-work [718]

The work value that Ramona feels the strongest is that the work with people

Explanation:

Work values are the values that are employed in a work place and there are many kinds of work values that develop the inter personal relationship between peoples

In the given statement she loves to work with the people in the after school program she loves to interact with the people talk with them and gain some personal experience and she feels them the strongest

4 0
3 years ago
On January 1, 2020, Klosterman Company issued $500,000, 10%, 10-year bonds at face value. Interest is payable annually on Januar
Ede4ka [16]

Answer and Explanation:

Journal entry to record the issuance of the bonds.

A.

Jan 1

Dr cash $500,000

Cr bonds payable $500,000

B. Journal entry to record the accrual of the interest

Dec 31 2020

Dr Interest expense $25,000

Cr Interest Payable $25,000

C. Journal entry to record the payment of interest on January 1, 2021.

Dr Interest expense $25,000

Cr Cash $25,0000

Interest expense $500,000×10%×1/2=$25,000

3 0
3 years ago
__________, a privacy tort, is closely related to defamation and occurs when publicity about a person creates an impression abou
NemiM [27]

Answer:

False Light

Explanation:

Hope this helps :)

5 0
3 years ago
Fargo Company's outstanding stock consists of 400 shares of noncumulative 5% preferred stock with a $10 par value and 3,000 shar
kifflom [539]

Answer: Option (a) is correct.

Explanation:

Given that,

Dividend in 2016 = $20,000

Preferred Shares = 400

Par Value of Preferred Stock = 400 × 10 = $4000

Rate of Dividend of Preferred Stock = 5%

(a) Dividend to preferred Shareholders:

= Par Value of Preferred Stock × Rate of Dividend

= $4000  × 5%

= $200

(b) Dividend to Common Shareholders:

= Total Dividend - Dividend to Preferred Shareholders

= $20,000  - $200

= $19,800

6 0
3 years ago
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