Calculate the annual after-tax cost of the interest expense

Assignment Help Finance Basics
Reference no: EM13293710

Assume the company has issued 15,000 bonds with a coupon rate of 10% and a face value of $1,000 per bond, and the company has a marginal tax rate of 40%. Calculate the annual after-tax cost of the interest expense.

Reference no: EM13293710

Questions Cloud

Obtain a set of questions relating to symmetrical components : A three phase star connected load is connected across a three phase balanced supply system. Obtain a set of questions relating to symmetrical components of the line and phase voltages.
How many yen could one u.s. dollar buy tomorrow : Suppose 144 yen could be purchased in the foreign exchange market for one U.S. dollar today. If the yen depreciates by 8.0% tomorrow, how many yen could one U.S. dollar buy tomorrow?
Estimate the speed of the electron : An old-style TV set places 50 kV across two plates of a parallel plate capacitor. What is the speed of the electron when it exits the hole in the plate
Design for all dc values and resistance values : Design a 2-stage voltage amplifier, the first stage a common-source and the second a source-follower. The load onthe S-F is 100 ohm, and the signal impedance is 1 K-ohm. The overall voltage gain should be -10 V/V. Use a single power supply, VDD = ..
Calculate the annual after-tax cost of the interest expense : Assume the company has issued 15,000 bonds with a coupon rate of 10% and a face value of $1,000 per bond, and the company has a marginal tax rate of 40%. Calculate the annual after-tax cost of the interest expense.
What is the concentration of sodium ions : What is the concentration of sodium ions inside the cell during an action potential compared to the sodium concnetration at rest? What is the permeability of the membrane to sodium during an action potential compared to the sodium permeability at res..
Estimate the work done by the gas : When 5.30* 10^5 J of heat is added to a gas enclosed cylinder fitted with a light frictionless piston maintained at atmospheric pressure, estimate the work done by the gas
Membrane potential of neurons during a stroke : What do you expect will happen to the membrane potential of neurons during a stroke?
What would be the interest portion of the payment scheduled : A mortgage loan in the amount of $100,000 is made at 12% interest for 20 years. Payments are to be monthly in each part of this problem.

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate trade and cash discounts

Use the Library to go to the SBA US Government, Small Business Administration web site. There is a vast amount of information available on this site.

  What is the value per share of your firm stock

what is the value per share of your firm's stock? Round your answer to the nearest cent. Do not round your intermediate computations.

  What would be the new per share value

If the company goes beyond 30 percent debt, its bonds would carry a lower rating and a much higher coupon because the possibility of financial distress and the associated costs would rise sharply. Volcan has a 40 percent corporate tax rate.

  Adelaide qualified profit sharing plan

Adelaide qualified profit sharing plan

  How much less could you have deposited last year

How much less could you have deposited last year if you could have earned a fixed rate of 6.5 percent and still have the same amount as you currently will when you retire 38 years from today?

  Initial investment and problems in getting it funded

Find a new possible investment item for Lockheed Martin, what problems are you going to have in estimating the cash flow that might be emanating from the initial investment and problems in getting it funded?

  Discuss the concept of investing in bonds

Discuss the concept of investing in bonds. With a definition of what kind of investment a bond is, how bonds are bought and sold, how bond prices are affected by interest rate fluctuations.

  Explain three accounting and finance features

List and explain three accounting and finance features for limited corporations? How is accounting and financial reporting regulated in your country?

  Calculate covariance and correlation between returns

Mr. Henry can invest in Highbull stock and Slowbear stock. His projection of the returns on these two stocks is as follows:

  What is the project npv

The applicable depreciation rates are 20%, 32%, 19%, 12%, 11%, and 6%. If the machine costs $60,000, what is the project's NPV?

  What rate of return will dr. stein need to achieve this goal

He calculates that he will need $80,000 for his son's education by the time the boy goes to school. What rate of return will Dr. Stein need to achieve this goal?

  Explore the cost of capital and the relationship

Explore the cost of capital and the relationship that debt has to the weighted average cost of capital. Address the question, "if debt capital is the lower cost source of capital, why don't MNEs highly leverage their capital structure?"

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