User Account

All Pages

What is the after-tax cost of debt for pearce cricket farm

Assignment Help Financial Accounting
Reference no: EM132742734

Pearce's Cricket Farm issued a 30-year, 8% semiannual bond 4 years ago. The bond currently sells for 94% of its face value. The company's tax rate is 35%. Assume the par value of the bond is $1,000.

Problem a. What is the pre-tax cost of debt? (Do not round intermediate calculations. Round the final answer to 3 decimal places.)

Problem b. What is the after-tax cost of debt? (Do not round intermediate calculations. Round the final answer to 3 decimal places.)

Problem c. Which is more relevant, the pre-tax or the after-tax cost of debt?

Reference no: EM132742734

Questions Cloud

Beneficial to manufacturing and service operations clients : Your process team has been requested to identify technology that would be beneficial to manufacturing and service operations clients
Will the bond proceeds always be less than the face amount : Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest
Calculate the cost of equity using the dividend growth : Calculate the cost of equity using the dividend growth model method. (Do not round intermediate calculations. Round the final answer to 2 decimal places.)
Define strategic management : Define strategic management within a framework of total quality service. What is total quality service and how does strategic management fits in with TQS?
What is the after-tax cost of debt for pearce cricket farm : Pearce's Cricket Farm issued a 30-year, 8% semiannual bond 4 years ago. Which is more relevant, the pre-tax or the after-tax cost of debt?
Manufacturer about eliminating the waste : What suggestions would you give the manufacturer about eliminating the waste? How could a supplier help eliminate that waste?
Determine the types of inventories these companies : Determine the types of inventories these companies currently manage and describe their essential inventory characteristics.
How does an installment note differ from a bond payable : Fleeson Company needs additional funds to purchase equipment for a new production facility, How does an installment note differ from a bond payable
What rate should the firm use to discount the project cash : What rate should the firm use to discount the project's cash flows? If Raymond Mining is evaluating a new investment project that has the same risk.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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