After-tax cost of debt on the? bond

Assignment Help Finance Basics
Reference no: EM131627550

Belton Distribution Company is issuing a ?$1,000 par value bond that pays 7.0 percent annual interest and matures in 15 years that is paid semiannually. Investors are willing to pay ?$958 for the bond. The company is in the 18 percent marginal tax bracket. What is the? firm's after-tax cost of debt on the? bond?

Reference no: EM131627550

Questions Cloud

Speaker review about leadership or entrepreneurship : case study or interview or speaker review about leadership or entrepreneurship
Take a position on the long-term affect : Take a position on the long-term affect these alternative financing options may have on small businesses and the economy in the U.S.
Computing the cost of preferred? stock : In the spring of 2017 the Marrion Metal Shaping Company was planning on issuing preferred stock to help finance a major plant expansion.
Likability is becoming a bigger factor for success at work : Likability" is becoming a bigger factor for success at work as social networks and video conferencing grow.
After-tax cost of debt on the? bond : The company is in the 18 percent marginal tax bracket. What is the? firm's after-tax cost of debt on the? bond?
Determining constant growth rate : At a constant growth rate of 4 ?percent, what is the value of the common stock if the investors require a 9 percent rate of? return?
Describe the characteristics of the perfect manager : Describe the characteristics of the perfect manager to see a company through all stages of organizational growth.
Percent of earnings for investment? purposes : If? Pepperdine, Inc.'s return on equity is 18 percent and the management plans to retain 64 percent of earnings for investment? purposes,
What will his reportable income be : Juan Gonzalez, a single person working for Harla, Inc., will earn $48,000 in 2015 and contribute $7,000 to the firm's 401(k) plan. If Juan is in the 25% tax.

Reviews

Write a Review

Finance Basics Questions & Answers

  How you can realize guaranteed profit from covered interest

Show how you can realize a guaranteed profit from covered interest arbitrage. Assume that you are a euro-based investor. Also determine the size of the arbitrage profit.

  Calculate the price-to-book ratio for dow jones

The Wall Street Journal, similar to other newspapers, has struggled against competition posed by the Internet and other electronic outlets. Discuss the effect that macroeconomic factors can have on the value of a stock.

  What is the best inventory policy for the component

How does this compare with the option of making the component internally at a rate of 80 units a day?

  Describes why firms produce financial statements

Which of the following best describes why firms produce financial statements?

  Calculate the operating breakeven point in units

Each warmer produced has a variable operating cost of $0.84 and sells for $1.00. Fixed operating costs are $28,000. The firm has annual interest charges of $6,000, preferred dividends of $2,000, and a 40% tax rate.

  What is the best estimate of the nominal interest rate

Assuming that interest rates in the economy are expected to remain at their current level, what is the best estimate of the nominal interest rate on new bonds? Round your answer to two decimal places.

  What is the present value of winnings

You just won the lottery. You and your heirs will receive $65,000 per year forever, beginning one year from now. What is the present value of your winnings at an 10% discount rate?

  How does the relationship between the average return and the

How does the relationship between the average return and the historical volatility of individual stocks differ from the relationship between the average return and the historical volatility of large, well-diversified portfolios?

  Who be looking over the shoulder of the project manager

Who should be "looking over the shoulder" of the project manager to make sure that the work and requests are also in the best interest of the company?

  Why balance sheet called dirty-surplus income

Why can "value be lost" if an analyst works with reported net income rather than comprehensive income?

  Calculate the npv of each choice

Bell Mountain Vineyards is considering updating its current manual accounting system with a high-end electronic system. While the new accounting system would save the company money, the cost of the system continues to decline.

  International risks and benefits

What international risks do you think most threatens an American company's business units overseas? What benefits of being overseas would offset these particular risks?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd