User Account

All Pages

Calculate the pre-tax cost of debt

Assignment Help Financial Accounting
Reference no: EM132855767

Question - A firm sold a 30-year bond issued two years ago. The bond has a 5.25% annual coupon and a face value of $1,000. If the current market price of the bond is $972.32 and the tax rate is 35%. Calculate the pre-tax cost of debt and the after tax-cost of debt. Which is more relevant to a firm's cost of capital?

Reference no: EM132855767

Questions Cloud

Evaluate the law of diminishing marginal utility : Examine the diamond-water paradox. Why are diamonds more expensive than water? Evaluate the law of diminishing marginal utility.
Calculate the p-value for the test : Suppose the conclusion the sample leads to in a) is erroneous. Is the error Type I or Type II?
What is the firm weighted average cost of capital : What is the firm's weighted average cost of capital given the following inputs: Market value of equity $25 million, Market value of debt $20 million
What are the impacts of various forms of elasticities : What are the impacts of various forms of elasticities (elastic, inelastic, unit elastic, etc.) on business decisions and strategies to maximize profit?
Calculate the pre-tax cost of debt : If the current market price of the bond is $972.32 and the tax rate is 35%. Calculate the pre-tax cost of debt and the after tax-cost of debt
Determine a topic about inflation targeting was invented : Determine a topic about Inflation targeting was invented to keep central bankers from making mistakes. Your essays should focus on the economic content
What is all about the law of large numbers : What is all about The Law of Large Numbers? Explain this in detail using an example.
How many different orders can all the songs be played : A CD with 11 songs is played with a CD player on non-repeating shuffle mode. In how many different orders can all the songs be played?
Find the sample mean and standard deviation : Find the sample mean and standard deviation. Plot it in a histogram. Does the data seem to follow the bell curve of the normal distribution?

Reviews

Write a Review

Financial Accounting Questions & Answers

  What is the final balance of the salaries expense account

What is the final balance of the "Salaries Expense" account, and is it a debit or credit? What is an audit opinion

  Find what is the bond capital gain or loss yield

What is the bond's capital gain or loss yield? How would the price of the bond be affected by a change in the going market interestrate?

  What is the maturity date and authorization date

What is the maturity date and authorization date for all 1 , 2, 3. $32,000, 8-year, 10% note payable, cash interest payable semiannually to yield 9.5%.

  Determine the gain or loss on the retirement on bonds

On that day, the unamortized discount is$3,200. The company called the bonds at 101. Determine the gain or loss on the retirement on bonds.

  How much would be willing to lend the business owner

A small business owner visits his bank, If the bank is charging customers 8.5 percent APR. how much would it be willing to lend the business owner?

  What are the ytm and the current yield

On July 1, 2013, Cristiano's bonds sold for $916.42. What are the YTM, the current yield, and the capital gains yield for that date?

  What is the expected sales price for the land

A restaurant has decided to invest in a piece of land. Management has estimated that the land can be sold in 5 years for the following possible prices:

  Find what was annual rate of return on the stock

If Mico.com stock on March 1, 1993 for $45 and you sold the stock at $168 on February 28, 1998, what was your annual rate of return on the stock?

  What is the amount of gain recognized the time of trade

Nemo, Inc.,What is the amount of gain or loss recognized the time of trade by Nemo? (for a loss place negative sign next to the answer)

  Determine how much manufacturing overhead was applied

At Marlin's biscuit factory, manufacturing overhead is applied based on direct labor cost. How much manufacturing overhead was applied?

  Problem - Determining an Ending Account Balance

Problem - Determining an Ending Account Balance - The company received a contribution of $1,000 from each of the two principal owners

  Determine the amount of cash flow for the purchase

Determine the amount of cash flow for the purchase of treasury stock that should appear on the Year 2 statement of cash flows.

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: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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