answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
AlexFokin [52]
2 years ago
11

A corporate bond has a face value of $1,000 and a coupon rate of 6.5%. The bond matures in 10 years and has a current market pri

ce of $985. If the corporation sells more bonds it will incur flotation costs of $36 per bond. If the corporate tax rate is 34%, what is the after-tax cost of debt capital?a)5.71%b)5.45%c)5.18%d)4.78%
Business
1 answer:
Virty [35]2 years ago
3 0

Answer:After-tax cost of debt capital = 4.78%

Explanation:

Cost of debt (After-tax):

K_{d} = (\frac{1}{P_{b}} - F)\times(1 – tax rate)

Where,

K_{d}= After tax cost of debt

F = Floatation cost

P_{b} = Net proceeds

Net proceeds = Bond face value ± Premium or Discount

Net proceeds: $ 1000 - $ 15 = $ 985

Flotation cost = $ 36

Tax rate 34% or 0.34

Hence, after tax cost of debt =  (\frac{65}{985} - 36)\times(1 - 0.34)

= 4.778 % (approx.)

i.e. 4.78%

You might be interested in
Liability policies, such as personal liability, professional malpractice, or business liability insurance, do NOT protect the in
photoshop1234 [79]

Answer:

b. intentional harm caused by the insured.

Explanation:

Liability insurance is a means to provide the insured party with some protection against claims resulting from injuries and damage to people or property, covering both legal costs and any payouts for which the insured party would be responsible if found legally liable.

Note that there are two types of liability coverage: bodily injury and property damage.  Most states in the US require liability coverages, subject to limits, which is the maximum amount the insurer will pay when the incident occurs.  For example, a car accident can be expensive.  This is why there is a limit of compensation which an insurer can offer.

8 0
2 years ago
Carl Sonntag wanted to compare what proceeds he would receive with a simple interest note versus a simple discount note. Both ha
nadya68 [22]

Answer:

The proceeds from the simple discount note is $16380 , while that of simple interest is $19500

Explanation:

Simple discount notes could likened to a bank loan where interest on the loan is taken from the borrowed funds before disbursement to the loan's beneficiary,hence proceeds from such notes is face value of the notes less interest taken in advance.

While on the other hand,the proceeds from simple interest note is par or face value.

The discount or interest  is =8%*$19500=$1560 for one year,but $3120  for two years($1560*2)

The proceeds on the simple discount note =$19500-$3120

                                                                         =$16380

The proceeds on the simple interest note is face value of $19500

3 0
2 years ago
Which is not a reason for supporting ethical relativism?
raketka [301]

This is not the reason why not support ethical relativism; Ethical relativism holds that there is a right and wrong, even though we do not agree about what is right and wrong and If people disagree about some moral matter, their disagreement will always be due to their having different moral values.

4 0
2 years ago
Imagine that a small manufacturing company decides to invest in a materials resources planning (MRP) system. This is a computeri
klio [65]

The correct answer to this open question is the following.

Although there are no options attached, we can say the following,

The human resource functions that are likely to be affected by this change are Resource Management, Personal Data Management, Training, and Performance Management.

Human Resource Management helps the organization carry out this change successfully, explaining how these modifications can benefit the employees and the entire organization. HR has to use the proper means of internal communication to explain in advance the kinds of oof changes that are coming. This will prevent fear and anxiety, and eliminate rumors about the situation of the employees in the organization.

HR has to be careful in confirming that nobody is going to be fired by the arrival of new technologies. Then, HR has to explain in detail the many benefits in planning, scheduling, organizing, inventory, and many other benefits for each department. If employees do not feel threatened by this new technology they would welcome changes that allow them to do their work more productively.

5 0
2 years ago
The Balance Sheet of Greene, Inc. on January 1, 20X1 showed the following. Assets $30,000, Liabilities $20,000 and Stockholder's
scZoUnD [109]

Answer:

B. 51,000

Explanation:

The computation of the total assets at the end of the year is shown below:

= Opening balance of asset account + revenue collected - expenses incurred + additional assets purchased + additional cash invested in the business

= $30,000 + $30,000 - $34,000 + $15,000 + $10,000

= $51,000

Simply we deduct the expenses incurred and the rest of the items are to be added in the beginning balance of asset account so that the accurate amount can come.

6 0
2 years ago
Other questions:
  • ​an object's _____ are the tasks or functions that the object performs when it receives a command to do so.
    6·1 answer
  • Cash Short and Over Entries 1. Based on the information, prepare the weekly entries for cash receipts from service fees and cash
    10·1 answer
  • Soft Key is trying to determine how best to produce its newest product, DVORK keyboards. The keyboards could be produced in hous
    6·1 answer
  • When the price of a candy bar is $1.00, the quantity demanded is 500 per day. When the price falls to $0.80, the quantity demand
    13·1 answer
  • Last year the imaginary country of Basova had a population of 10,000, 6,000 people worked 8 hours a day, and produced a real GDP
    10·1 answer
  • Dayna’s Doorstops, Inc. (DD) is a monopolist in the doorstop industry. Its cost is C  100  5Q  Q2, and demand is P  55  2Q.
    15·1 answer
  • University of Florida football programs are printed 1 week prior to each home game. Attendance averages 75 comma 000 screaming a
    14·1 answer
  • Brainliest Week
    11·1 answer
  • "If the previous chart measures CaliMart’s revenues in millions of dollars, how much money did CaliMart make in 2005"
    11·1 answer
  • We are evaluating a project that costs $1.68 million, has a six-year life, and has no salvage value. Assume that depreciation is
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!