7- The after-tax cost of debt generally increases when: I. present value (price) decreases. II. the market rate of interest increases. III. coupon rate decreases. IV. yield to maturity increases. PT A. I and II only B. III and IV only C. I, II, and IV only D. II, III, and IV only E. I, II, III, and IV gmiten 105
Answers
The correct answer is option D: II, III, and IV only. The after-tax cost of debt refers to the effective interest rate a company pays on its debt after taking into account the tax benefits associated with the interest expense. The after-tax cost of debt generally increases under the following circumstances:
II. The market rate of interest increases: When the market rate of interest rises, it becomes more expensive for companies to borrow money. This increase in borrowing costs leads to a higher after-tax cost of debt.
III. The coupon rate decreases: The coupon rate is the fixed interest rate specified on a bond or debt instrument. If the coupon rate decreases, it means that the interest payments received by bondholders decrease. As a result, the after-tax cost of debt increases.
IV. The yield to maturity increases: The yield to maturity is the total return anticipated on a bond if it is held until it matures. If the yield to maturity increases, it implies that the bond price has decreased. When bond prices decrease, the after-tax cost of debt increases.
Option I (present value or price decreases) is incorrect because changes in the present value or price of a bond do not directly affect the after-tax cost of debt.
To know more about interest visit-
brainly.com/question/15228306
#SPJ11
Related Questions
James is the human resource manager at a large bottle manufacturing company. Ten years ago, when the business moved to its current location, the company structured operations around the different functions performed throughout the company. To enhance the speed and effectiveness of decision-making, James is now restructuring company activities around its three major product lines. James is undertaking the process of grouping jobs known as
Answers
Answer:
departmentalization
Explanation:
Departmentalization is defined as the process of grouping various activities according to departments.
Each department tends to specialise in the assigned activity. This method promotes division of labour where a group of people specialise in one activity.
In the given scenario James is restructuring operations around three product lines to increase speed and effectiveness of decision making.
This is departmentalization with a view of increasing process efficiency
I need a good answer to this by Friday. Research various sources or Web sites that can help an entrepreneur with writing a business plan.
Now create a "Top 10" list of these sources in a table. The first one has been done for you.
Discuss what your first choice of sources to use as an entrepreneur would be and explain why.
Answers
The Web sites that can help an entrepreneur in writing a good business plan are:
The Economist.Forbes.com/entrepreneur.Under 30 CEO, etc.What is a business plan?A business plan is known to be a kind of written document that tells onw what they need to know about how a business can be run and also startup.
Concussively, Note that a business plan is regarded as the roadmap for any company in terms of marketing, financial standpoints, etc. The Economist will help the entrepreneur to know more about starting a business and what the market looks like.
Learn more about Web sites from
https://brainly.com/question/13171394
#SPJ1
It is January 2nd. Senior management of Baldwin meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing 50,000 shares of stock plus a new bond issue. The CFO happily notes this will raise their Leverage (=assets/equity) to a new target of 2.7. Assume the stock can be issued at yesterday’s stock price ($41.76). Which of the following statements are true? Check all that apply.
CHOOSE 3
The Baldwin bond issue will be $3,549,600
Total Assets will rise to $233,356,000
Long term debt will increase from $83,635,560 to $85,723,560
Baldwin will issue stock totaling $2,088,000
Total investment for Baldwin will be $5,637,600
The Baldwin Working Capital will be unchanged at $17,469
Answers
In summary, the three true statements are: Baldwin will issue stock totaling $2,088,000., Total investment for Baldwin will be $5,637,600., The Baldwin Working Capital will be unchanged at $17,469.
Let's go through each statement and determine which ones are true based on the given information:
The Baldwin bond issue will be $3,549,600.
This statement cannot be verified as we don't have any information regarding the value of the bond issue.
Total Assets will rise to $233,356,000.
We know that the new leverage target is 2.7 and the stock issuance is 50,000 shares at yesterday's stock price of $41.76. Therefore, the equity portion from the stock issuance will be 50,000 shares * $41.76 = $2,088,000. To calculate the total assets, we can use the leverage formula: Leverage = Assets/Equity. Rearranging the formula, we have Assets = Leverage * Equity. Plugging in the values, we get Assets = 2.7 * $2,088,000 = $5,634,960. This statement is false, as the total assets will be $5,634,960, not $233,356,000.
Long-term debt will increase from $83,635,560 to $85,723,560.
This statement cannot be verified as we don't have any information regarding the specific amount of the new bond issue.
Baldwin will issue stock totaling $2,088,000.
This statement is true. We calculated earlier that the equity portion from the stock issuance is $2,088,000.
Total investment for Baldwin will be $5,637,600.
This statement is true. The total investment consists of the equity portion from the stock issuance ($2,088,000) plus the value of the new bond issue (which is unknown).
The Baldwin Working Capital will be unchanged at $17,469.
This statement is true. The working capital is not mentioned to be affected by the decision to fully fund a plant and equipment purchase through stock issuance and a new bond issue, so it remains unchanged at $17,469.
In summary, the three true statements are:
Baldwin will issue stock totaling $2,088,000.
Total investment for Baldwin will be $5,637,600.
The Baldwin Working Capital will be unchanged at $17,469.
Learn more about Baldwin
https://brainly.com/question/8607284
#SPJ4
As you rule, you should not spend more than______of your pre-tax dollars on housing?
Answers
Answer:
36%
Explanation:
According to this rule, a household should spend a maximum of 28% of its gross monthly income on total housing expenses and no more than 36% on total debt service, including housing and other debt such as car loans and credit cards. Lenders often use this rule to assess whether to extend credit to borrowers.
Which of the following is an example of a soft skill?
A. Ability to use CSS spreadsheets
B. Ability to manage spreadsheets
C. Ability to work well with a project team
D. Ability to manipulate images using computer software
Answers
Answer:
Ability to work well with a project team
Explanation:
A car manufacturer is offering the choice of a 0.2% loan compounded monthly for 72 months or $1800 cash back on the purchase of a $20,500 new car. Completo parts (a) through (c) below.
(a) If a car buyer takes the 0.2% loan offer, how much will the monthly payment bo?
The car buyer's monthly payment will be $
(Do not round until the final answer. Then round to the nearest cont as needed.)
Answers
Answer:
$286.5
Explanation:
Given the following:
Principal (P) = $20,500
Period(n) = 72 months
Rate(r) = 0.2% = 0.002/12 = 0.000166666666
Monthly payment (M) =?
M = P [ r / (1 - (1 + r)^-n) ]
M = 20500[(0.000166666666) / (1 - (1+0.000166666666)^-72)
M=20500[(0.000166666666) / 1 - (1.000166666666^-72)
M= 20500[(0.000166666666) / 0.01192729912821
M = $20500 [ 0.01397354624952]
M = $286.457698115328
M = $286.5
Which type of bankruptcy will remain in an individual's credit
history for 10 years?
O Chapter 11
O Chapter 9
O Chapter 7
O Chapter 13
Answers
Chapter 7 and Chapter 11 bankruptcies will remain in an individual's credit history for 10 years.
Your credit history will reflect a bankruptcy filing for a number of years. The length of time a bankruptcy stays on your credit report depends on the type of bankruptcy you choose. Bankruptcies filed under Chapter 7 and Chapter 11 will stay on your credit report for 10 years. Your credit report will show a Chapter 13 bankruptcy for seven years after it has been filed.
If you adopt a disciplined approach to paying your creditors, paying bills on time, and maintaining a sustainable level of debt on credit cards and other revolving credit, the impact of the bankruptcy on your credit score will progressively lessen as the years go by.
To know more about chapter 7 and other bankrupties, refer:
https://brainly.com/question/11361846
#SPJ1
The function f(x) = 2,000(1 + )12t models the balance in a savings account.
The savings account had an initial balance of _ and compounds
_ at an interest rate of _
Answers
Answer:
In the exponential function f(x) = P(1 + )nt :
P = principal value
r = the annual interest rate
n = number of compounding periods in a year
t = time in years
For the given function, P = 2,000, r = 0.0225, or 2.25%, and n = 12. So, the interest compounds 12 times a year, or monthly.
Therefore, the savings account had an initial balance of $2,000 and compounds monthly at an interest rate of 2.25%.
Explanation:
Explanation from PLATO
how does surface tension work in chemistry
Answers
Surface tension is a phenomenon that occurs in chemistry due to the cohesive forces between molecules at the surface of a liquid.
How do these forces arise ?
Chemistry experiences surface tension, a phenomenon arising from cohesive forces amid molecules at the surface of a liquid generated by intermolecular forces like hydrogen bonding, dipole-dipole interactions and London dispersion.
They experience a net inward force as there are no molecules above to balance out the exerting cohesive forces below when situated atop of a liquid's surface.
Find out more on surface tension at https://brainly.com/question/14530972
#SPJ1
Surface tension could be a property of fluids that emerges due to the cohesive powers between the fluid particles.
How does surface tension work in chemistry?Cohesion is the propensity of comparative atoms to pull in each other, and in a fluid, these cohesive powers hold the atoms together and avoid them from isolating.
At the surface of a fluid, the atoms involvement diverse strengths than they do inside the bulk of the fluid. Since there are no particles over the surface, the atoms at the surface are pulled in more unequivocally to the neighboring atoms at the surface than to the particles within the air above the surface.
Therefore, this comes about in a net internal drive that makes a "skin" or "film" at the surface of the fluid, known as surface tension
Learn more about surface tension from
https://brainly.com/question/806204
#SPJ1
The following picture is best described as
a(n)...
A. Organism
B. Community
C. Population
D. Ecosystem
Answers
Answer:
organism
Explanation:
a gree fish is an organism
A main reason that environmental scanning is important is so that businesses can be aware of.
Answers
Potential threats are the main reason that environmental scanning is important so that businesses can be aware of them.
The Potential Threats screen displays information about security risks to your customers and networks. The security server collects threat information by running the Vulnerability Assessment and Cleaning Service to clean up the threats.
A vulnerable computer has weaknesses in its operating system or applications. Many threats exploit these vulnerabilities to cause damage or gain unauthorized control. As a result, vulnerabilities not only pose a risk to the individual computers on which they reside but also to other computers on your network. The Vulnerability section lists all the clients on your network for which vulnerabilities have been discovered since the last vulnerability assessment. You can see the last update time in the upper right corner of the screen.
The Potential Threat Screen classifies clients based on the level of risk they pose to the network. The risk level is calculated by Trend Micro and represents the relative number and severity of vulnerabilities for each customer.
Learn more about Potential Threats here: https://brainly.com/question/26188793
#SPJ4
State one reason why a business would want to offer a high-quality service
Answers
Answer:
so as to make trust to his contomers and well managed
Positive reputation leads to higher growth. Reputation goes a long way in a business. It attracts customers, investors, partnerships, and employees.
Aaron gets up every morning and goes to the restaurant where he cooks. When talking about his job, Aaron says, "I can't help it—I love to make people happy! The looks on their faces when they see their dinners is all the reward I'll ever need!" Aaron has never been late to work, and he always shows up with a smile.
Answers
Answer:
Passion towards work
Explanation:
In simple words, the given paragraph shows that Aaron is passionate and fully dedicated towards his work. He feels proud and secured about his job and do not need monetary incentives to perform well or up to the mark. The paragraph also signifies that Aaron has mastered in his job and is able to perform better than his peers.
ohn budd is the sole stockholder of ral corp., an accrual basis taxpayer engaged in wholesaling operations. ral's retained earnings at january 1, year 9, amounted to $1,000,000. for the year ended december 31, year 9, ral's book income, before federal income tax, was $300,000. included in the computation of this $300,000 were the following: dividends received on 500 shares of stock of a taxable domestic corporation that had 1,000,000 shares of stock outstanding (ral had no portfolio indebtedness) $1,000 what portion of the dividend revenue should be included in ral's year 9 taxable income?
Answers
The portion of dividend revenue should be included in Ral's year 9 taxable income is $700000.
What is a dividend?A dividend is the distribution of a company's profits to its shareholders. Any money that is left over is seized and put back into the business (called retained earnings). Due to the fact that a corporation is often not permitted to pay dividends out of its capital, both the profit from the current year and the retained earnings from earlier years are available for distribution. Dividends received by shareholders are considered income and may be subject to income tax. Depending on the jurisdiction, different taxes may be applied on this revenue. It is not tax deductible for the corporation to pay dividends. A fixed amount is distributed per share and is distributed as a dividend to shareholders in proportion to their ownership.
Taxable income= $1,000,000-$300,000= $700000
To learn more about dividend, visit:
https://brainly.com/question/29509520
#SPJ4
Analyse, one way a country is likely to
benefit from the expansion of its
business
enterprises.
Answers
Answer:
earning of foreign and upliftment of the host country.
Explanation:
as a bussiness expands into other countries the profits it makes if it becomes successful are retained back to the host country as retained profits and this changes the economy as government earns part pf the revunue due to the tax earnings
8) Which of the following accounts will be closed by debiting the Income summary account:
A) Depreciation expense
B) Accounts payable
C) Accumulated depreciation
D) Service revenue
Answers
The depreciation expense account will be closed by debiting the Income summary account. Therefore, the correct option is A.
What is an Income summary account?
An income summary account refers to an account that receives all the temporary accounts of a business upon closing them at the end of every accounting period.
This summarizes that the value of each account in the income statement is debited from the provisional accounts and then credited as one value to the income summary account.
Therefore, The depreciation expense account will be closed by debiting the Income summary account. the correct option is A.
learn more about Income summary account:
https://brainly.com/question/23452342
#SPJ1
Which of the following effect is seen on the money supply and the economy when the Federal Reserve Board raises the discount rate?
A. Interest rates decrease, the money supply increases, and economic activity increases.
B. Interest rates increase, the money supply decreased, and economic activity slows down.
C. Banks make more loans, the money supply increases, and economic activity increases.
Answers
When the Federal Reserve Board raises the discount rate, it leads to an increase in interest rates. Therefore, the correct option is B: "Interest rates increase, the money supply decreases, and economic activity slows down."
The discount rate is the interest rate that the Federal Reserve charges member banks when they borrow money from the Fed's discount window. By raising the discount rate, the Fed is effectively making it more expensive for banks to borrow money. As a result, banks will be less likely to borrow from the Fed and will instead try to raise funds from other sources, such as by increasing their interest rates on loans to customers.
Higher interest rates make it more expensive for consumers and businesses to borrow money, leading to a decrease in borrowing and spending. This can slow down economic activity, as businesses reduce production and hiring and consumers cut back on their purchases.
To learn more about Federal Reserve, visit here
https://brainly.com/question/23247429
#SPJ4
Analyzing How did World War I cause the federal government to change its relationship with the business world
Answers
The US government had a significant impact on the business community during and after World War I. During the war, the government utilized businesses to supply arms, munitions, and resources to the military. Post-war, there was an increased government involvement in regulating the business sector, resulting in a shift in the government's relationship with businesses.
To coordinate the war efforts, the federal government established the War Industries Board (WIB) in 1917. The WIB was responsible for overseeing the production and distribution of war materials. It collaborated with businesses to ensure the military's needs were met, but it also exerted pressure on companies to limit production and restrict sales of nonessential goods.
In 1918, the government enacted the Lever Food and Fuel Control Act, which expanded its authority over the economy. This legislation granted the government power to regulate food prices and other essential items. The act led to the establishment of the US Food Administration, responsible for food distribution and conservation. The agency also conducted advertising campaigns encouraging Americans to conserve food and support the war effort.
These government actions during World War I set the stage for the New Deal, a series of measures aimed at improving the economy and regulating business practices. The Securities Act of 1933, a significant piece of legislation during the New Deal, aimed to restore investor confidence in the stock market. The act required companies to provide more information about their securities offerings, enhancing transparency in the business world.
Overall, World War I had a profound impact on the government-business relationship. The government's actions during the war, such as establishing the War Industries Board and enacting the Lever Food and Fuel Control Act, laid the foundation for increased government regulation of business practices in the following years.
Learn more about economy
https://brainly.com/question/30131108
#SPJ11
4. If your checking account's balance is
$3,678.89 and you withdraw $1,514, what
is the remaining balance?
A $2,164.89
B $5,192.89
C$2,614.89
D $3,678.89
(Step by step ) please
Answers
Basically just subtract, 3,678.89-1514 = 2,164.89
where was the headquarters of the first bank of the united states?
Answers
Answer:
The headquarters of the First Bank of the United States was located in Philadelphia, Pennsylvania.
Question
Brampton Equipment produces two types of engine: the X model and the Y model. The X model sells for $95 and has variable costs of $25. The Y model sells for $125 and has variable costs of $20. Fixed costs are $1,000,000 and Brampton sells two X model for every Y model sold.
Required:
1. What is the breakeven point in unit sales and dollars for each type of engine at the current sales mix.
2. Brampton is considering purchasing new equipment that will increase fixed costs by $245,000 per year. Variable costs will decrease by $5 for the X model and $10 for the Y model. How many of each type of engine must Brampton sell to break even?
3. Assuming the same sales mix, at what total sales level would Brampton be indifferent between using the old equipment and buying the new production equipment? If total sales are expected to be 20,000 units, should Brampton buy the new production equipment?
Answers
1. Breakeven Point: X model - 14,286 units or $1,357,770, Y model - 7,143 units or $892,875.
2. New Breakeven Point: X model - 14,722 units, Y model - 7,361 units.
3. Indifference Point: Total units - 16,333 units. Brampton should buy the new production equipment as the expected sales level exceeds the indifference point.
1. To calculate the breakeven point, we need to determine the number of units and the dollar amount required to cover the fixed costs.
For the X model:
Contribution Margin per unit = Selling Price - Variable Cost = $95 - $25 = $70
Breakeven Point in units = Fixed Costs / Contribution Margin per unit = $1,000,000 / $70 = 14,286 units
Breakeven Point in dollars = Breakeven Point in units * Selling Price = 14,286 * $95 = $1,357,770
For the Y model:
Contribution Margin per unit = Selling Price - Variable Cost = $125 - $20 = $105
Since Brampton sells two X models for every Y model sold, the breakeven point for the Y model will be half that of the X model.
Breakeven Point in units = 14,286 / 2 = 7,143 units
Breakeven Point in dollars = 7,143 * $125 = $892,875
2. With the new equipment, the variable costs per unit decrease. We need to recalculate the breakeven point considering these changes.
For the X model:
New Contribution Margin per unit = Selling Price - Variable Cost = $95 - $5 = $90
New Breakeven Point in units = Fixed Costs / Contribution Margin per unit = ($1,000,000 + $245,000) / $90 = 14,722 units
For the Y model:
New Contribution Margin per unit = Selling Price - Variable Cost = $125 - $10 = $115
New Breakeven Point in units = 14,722 / 2 = 7,361 units
3. To determine the sales level at which Brampton is indifferent between using the old equipment and buying the new equipment, we need to find the point where the total costs of the old equipment and the new equipment are equal.
Total Costs with the old equipment = Fixed Costs + (Variable Cost per unit * Total units)
Total Costs with the new equipment = New Fixed Costs + (New Variable Cost per unit * Total units)
Setting these two equations equal to each other, we can solve for the total units:
$1,000,000 + ($25 * Total units) = ($1,000,000 + $245,000) + (($20 - $10) * Total units)
$25 * Total units = $245,000 + $10 * Total units
$15 * Total units = $245,000
Total units = $245,000 / $15 = 16,333 units
Since the expected total sales are 20,000 units, Brampton should buy the new production equipment as it allows them to reach a higher sales level and potentially generate more profit.
For more such questions on Breakeven Point visit:
https://brainly.com/question/21137380
#SPJ8
This is a receipt for a purchase made at a restaurant in
Sacramento, California.
The total cost of the food and drinks before taxes was
The buyer paid vin sales tax.
Based on the receipt, Sacramento has a sales tax rate
of
Answers
Answer:
10.00 , .85 , 8.5
Explanation:
Answer:
This is a receipt for a purchase made at a restaurant in Sacramento, California.
The total cost of the food and drinks before taxes was
✔ $10.00
.
The buyer paid
✔ $0.85
in sales tax.
Based on the receipt, Sacramento has a sales tax rate of
✔ 8.5%
.
When you get in a business, make a lot of money, and then get out, it’s referred to as a(n)
A) easy-money business.
B) hit-and-run business.
C) failure.
D) missing opportunity.
Answers
Answer:
The answer is B. Hit-and-run business.
Explanation:
The cost-benefit principle states that _____ are the incentives that shape decisions.
Answers
The cost-benefit principle states that costs and benefits are the incentives that shape decisions.
How is the cost-benefit principle used?According to the fundamental of economics, the cost-benefit principle states that every rational being is likely to take into consideration the cost and the benefit of one or a set of decisions before a final choice is taken.
In order words, a line of decision for example an investment should only be undertaken only if the benefits associated with the cost of such investment are at least as large or way larger than the cost.
See the link below for more about the Cost-Benefit Principle:
https://brainly.com/question/885073
Indexation refers to a process of adjusting the nominal interest rate so that it is equal to the real interest rate. O using a law or contract to automatically correct a dollar amount for the effects of inflation. O using a price index to deflate dollar values. an adjustment made by the Bureau of Labor Statistics to the CPI so that the index is in line with the GDP deflator.
Answers
Indexation is the process of using a statute or contract to automatically adjust a dollar amount for the impacts of inflation to bring the nominal interest rate into line with the actual interest rate.
What is Indexation?Indexation refers to the process of changing a price, wage, or other value in response to changes in another price or a group of related values. Indexation can be used to account for changes in prices and costs across regions, as well as to account for the effects of inflation, cost of living, and input prices over time. Deindexation is the unwinding of indexation, which is a mechanism to adjust income transfers using a price index in order to maintain the public's purchasing power after inflation. The purchase price of an investment is modified through indexation to account for the impact of inflation on it. Lower earnings result from a greater purchasing price, which in turn results in a lower tax.
To learn more about indexation click,
https://brainly.com/question/4692093
#SPJ1
answer the above Questions
Answers
Answer:
4. b. Government
5. d. None of these
6. c. Trading communities
What is the primary duty of a public relations specialist?
A. To create advertising concepts
B. To deliver marketing messages
C. To communicate business activities with the press
D. To oversee graphic design tasks
Answers
Answer:
B. To deliver marketing messages
Explanation:
A public relation specialist is a professional who portrays goods and services in a good light/form to the public. This helps to create awareness and encourages the general public to buy such products.
Public relation specialist ensures that the company has a good relationship between the stakeholders, staffs and the general public thereby avoiding any type of clash.
What types of planning can be done to improve a nation’s economy?
A nation can undergo ____ planning or ___ planning in order to improve its economy.
Answers
Answer:
A nation can undergo long-term planning or constructive planning in order to improve its economy. Long-term planning involves setting goals and implementing policies that will have an impact over a period of several years. This type of planning may involve investments in education, infrastructure, and research and development, among other areas. Constructive planning involves implementing policies that encourage economic growth and development, such as reducing barriers to trade, promoting entrepreneurship and innovation, and investing in key industries. These types of planning can help a nation to create jobs, increase productivity, and improve living standards for its citizens. THANK YOUA firm using a(n) _____ essentially adopts a mass-market philosophy, viewing the market as one big market with no individual segments.
Answers
A firm using an undifferentiated target strategy is essentially adopts a mass-market philosophy, viewing the market as one big market with no individual segments.
What is target strategy?It involves selecting potential customers that have been identified for a target market.
This people are the individual that a business wish to sell products or services..
Therefore, A firm using an undifferentiated target strategy is essentially adopts a mass-market philosophy, viewing the market as one big market with no individual segments.
Learn more on target strategy here,
https://brainly.com/question/24967768
Avery co. has $1. 1 million of debt, $3 million of preferred stock, and $2. 2 million of common equity. what would be its weight on preferred stock?
Answers
The weight of preferred stock in Avery Co.'s capital structure is approximately 47.62%.
To calculate the weight of preferred stock in the capital structure of Avery Co., we need to determine the proportion of the total capital that is represented by preferred stock.
Total capital = Debt + Preferred Stock + Common Equity
Given: Debt = $1.1 million
Preferred Stock = $3 million
Common Equity = $2.2 million
Total capital = $1.1 million + $3 million + $2.2 million = $6.3 million
Now, we can calculate the weight of preferred stock as follows:
Weight of Preferred Stock = (Preferred Stock / Total capital) * 100
Weight of Preferred Stock = ($3 million / $6.3 million) * 100 ≈ 47.62%
The weight of preferred stock in Avery Co.'s capital structure is approximately 47.62%.
Learn more about stock from the given link:
https://brainly.com/question/26128641
#SPJ11