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hichkok12 [17]
2 years ago
11

Hamilton company’s 8 percent coupon rate, quarterly payment, $1,000 par value bond, which matures in 20 years, currently sells a

t a price of $686.86. the company’s tax rate is 40 percent. what is the firm’s component cost of debt for purposes of calculating the wacc?
Business
1 answer:
aliya0001 [1]2 years ago
4 0
The correct answer is the firm's component cost of debt for purposes of calculating the wacc is  7.32%. 
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Theo currently owns 700 shares of JKL, which is an all-equity firm with 320,000 shares of stock outstanding at a market price of
valentina_108 [34]

Answer:

correct option is c. 43.75

Explanation:

given data

share own = 700

stock outstanding = 320000

market price = $25

interest and taxes =  $160,000

debt = $500,000

interest = 7%

loan = 7.5 percent interest

to find out

How many shares of JKL stock must Theo sell to unlever

solution

first we get here no of share that repurchased is express  as

no of share =  \frac{debt}{market\ price}     ..............1

no of share =  \frac{500000}{25}

no of share = 20,000 shares

sell = share own × ( no of share ÷ stock outstanding  )    .................2

sell = 700 × \frac{20000}{320000}

sell = 43.75 shares

so correct option is c. 43.75

6 0
2 years ago
Customers around the world know Pepsi and consider it a primary "go-to" brand if they want a refreshing drink. This positioning
Sedbober [7]

Answer:

B. targeting strategy and marketing mix

Explanation:

In business, Targeting strategy refers to a strategy that a company implemented to sell their product to specific group of consumers.

In pepsi's case, they focus their targeting strategy toward the consumers who want a refreshing drink.

Marketing mix is a marketing strategy that is revolved around  product, price, place, and promotion. Companies could utilzie this 4 factors to create a business model that can make their targeting strategy succesful.

In pepsi's case:

They sold their product in almost every convenience store <u>(place) .</u> Making it easier for consumers who currently crave refreshing drinks. The <u>price </u>of Pepsi's product is very affordable.

<u>They designed and promote their produc</u>t to obtain a reputation as refreshing  a product that can relinquish your thirst.  You can see it in most of their advertising. Most of it consist of people in a hot weather that craves something cold and refreshing.

8 0
2 years ago
Spartan Corporation, a U.S. corporation, reported $2 million of pretax income from its business operations in Spartania, which w
AVprozaik [17]

Answer:

A. = (15% X $2M) + (21% X $2M) = $720,000. Since there is no mechanism for mitigating double taxation, the branch profit will be taxed on the to tax rate of 15% and 21% which is $300,000 and $420,000.

B. The total tax for $2m branch profit if US corporations can remove foreign based profit from US taxation will be just the 15% x $2m = $300,000.

C.If they are allowed to take deductions for foreign income taxes, the total tax on the $2m branch profit will be (21% -15%) x $2m = $120,000.

Explanation:

D.1. If credit are allowed for foreign income tax paid, total tax will be ($2m - $300,000 been foreign tax paid) x 21% = $357,000

D.2.

If the charge foreign income taxes at 30% and US corporations can claim refundable credit for foreign income tax paid on foreign source income = ($2m - $300,000 been the foreign income tax paid) = $1 700,000 x 30% = $510,000

6 0
2 years ago
A 10 percent increase in income leads to a 15% decrease in the quantity of macaroni and cheese demanded but no change in the pri
AlekseyPX

Answer:

Macaroni and cheese is an inferior good.

Explanation:

From the information given in the question, we can assume that macaroni and cheese are considered as an inferior good for this consumer because there is an inverse relationship between the income level of this consumer and the quantity demanded for macaroni and cheese.

If there is 10% increase in the income of an individual then as a result quantity demanded of macaroni and cheese decreases by 15% and the price of this good remains constant. This shows that macaroni and cheese is an inferior good.

6 0
2 years ago
Peter is a manager at a fast-food restaurant. He wants to introduce a kid's meal into the restaurant's menu. He wants to convinc
Ipatiy [6.2K]
It would be d because
8 0
2 years ago
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