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ololo11 [35]
3 years ago
14

Bond issue costs reduce the cash proceeds from the issuance of debt. do not affect the cash proceeds from the issuance of debt.

increase the effective interest rate of borrowing. increase the cash proceeds from the issuance of debt. decrease the effective interest rate of borrowing.
Business
1 answer:
tia_tia [17]3 years ago
4 0

Answer:

increase the effective interest rate of borrowing

Explanation:

Cost of debt refers to the total cost a company incurs for raising debt which includes fixed coupon rate payments to bondholders.

Cost of debt is calculated using the following formula:

K_{d} = \frac{I(1\ -\ t)}{NP}

wherein K_{d} = Cost of debt

             I = annual rate of coupon payment

             t= tax rate

            NP = Net proceeds which is par value less issue expenses

when NP is taken as the base, while calculating cost of debt, it is termed as effective interest rate.

So, bond issue costs reduce the net proceeds and thus, increase the effective interest rate of borrowing for the issuer company.

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An employer will do a 50% match on your investment to a 401k retirement plan. If you decide to contribute a monthly amount of $2
PtichkaEL [24]

Answer:

There will be $92,635.42 in the account after 15 years.

Explanation:

Missing question <em>"The interest rate is fixed at 2.05%"</em>

As the employer does a 50% match on the employee’s investment, the monthly contribution to the retirement plan will be = 2 * $220 = $ 440.

The future value (F) of an annuity is given by F = (P/r)[(1+r)n-1]

P is the periodic payment

r is the rate per period

n is the number of periods.

P = 440, r = 2.05/1200 and n = 15*12 = 180.

F = (440*1200/2.05)[ (1+2.05/1200)180 -1]

F = (528000/2.05)*0.359664042

F = 92635.4215493

F = $92635.42

Thus, there will be $92,635.42 in the account after 15 years.

6 0
2 years ago
If a company wanted to finance the purchase of equipment without diluting shareholders equity, which of the following operation
Jobisdone [24]

Answer:

Issuing convertible bonds

Explanation:

Convertible bonds are corporate bonds that can be exchanged for common stock in the issuing company. Companies issue convertible bonds to lower the coupon rate on debt and to delay dilution. A bond's conversion ratio determines how many shares an investor will get for it.

5 0
2 years ago
Orlando, the owner of a belgian event-planning company called memory makers, plans to open a marketing company that focuses on p
schepotkina [342]

Kick start will be totally owned and controlled by memory makers, which makes kick start a subsidiary of memory makers.

<h3>What is a Subsidiary?</h3>

This refers to the branch of a company which performs a different function from the parent company but has the same vision and mission which is to increase profit and sales.

With this in mind, we can see that because Orlando who owns an event planning company opens a marketing company so as to focus on product launches, this shows that they are a subsidiary.

Read more about subsidiary here:
brainly.com/question/4688609

5 0
2 years ago
A photocopier cost $105,000 when new and has accumulated depreciation of $96,000. if the business discards this plant asset, the
Ahat [919]

A photocopier cost $105,000 when new and has accumulated depreciation of $96,000. if the business discards this plant asset, the result is a loss of 9,000.

During the asset's anticipated useful life, depreciation is allocated in order to charge a fair percentage of the depreciable amount in each accounting period. Amortization of assets with predetermined useful lives is included in depreciation. Depreciation enables businesses to recoup the cost of an item at the time of acquisition. Instead of collecting the full cost of an asset right away, the technique enables businesses to do so during the asset's lifecycle. This enables businesses to replace current assets with the necessary quantity of revenue in the future.

Subtract the asset's cost from its salvage value (what you anticipate it to be worth at the end of its useful life) to determine depreciation using the straight-line technique. The outcome is the amount or depreciable basis.

Depreciation = asset's cost - salvage value

Depreciation = $105,000 - $96,000

Depreciation = $9,000

To know more about Depreciation refer to:  brainly.com/question/15085226

#SPJ4

4 0
1 year ago
Organizational and managerial skills that find their expression in a company's structure, routines, and culture are referred to
Aliun [14]
It is referred to as Capabilities. It is essential to accomplish its business model or bring about its mission. In addition, an easy way to comprehend the thought is to think about capabilities as organizational level expertise is set in people, method, and technology.  
7 0
3 years ago
Read 2 more answers
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