what is the after-tax cost of the company's debt? (D 5.)

Q: When calculating the after-tax weighted average cost of capital, which of the following has to be…

A: Weighted average cost of capital: It implies to a rate at which the average return is expected to be…

Q: profit of a firm if a debenture is issued at

A: A debenture is said to be issued at a premium  when the price charged is more than its nominal…

Q: If a firm is interested in the current cost of its debt obligations, then it can simply look at the…

A: Cost on debt can be considered after deducting tax expenses. Cost of debt is eligible for tax…

Q: Problem 2:- How does inflation impact key ratios? What is the difference between book value and…

A:

Q: 12.1 How does depreciation affect income taxes?

A: Depreciation is a non cash expense which is charged in order to record reduction in value of fixed…

Q: Differentiate the tax effects of financing a company with stocks and debts. Your answer should…

A: Stock are have high cost because expectations of shareholders are very high and also there is no tax…

Q: what happens to the cost of debt if the pourcentage of debt gets lower in the capital structure

A: Cost of debt is the return that is expected by all debt holders. They get their return in the form…

Q: Is it true that the book value of a company equals the value or it's assets according to their…

A: Book value of the firm is the value of its liquidating i.e the total amount when its assets are sold…

Q: Under what circumstances might a salary or bonus be more appropriate than interest on capital…

A: Partnership: The form of business entity which is formed by an agreement, owned and managed mutually…

Q: Reffering to the below sheet  1) What is the current portion of long-term liabilities  and for what…

A: Companies plan their capital structure to reduce the cost of financing.

Q: Discuss MM proposition II under the situation when there are corporate taxes and risk-free debt.

A: Corporate tax is defined as the tax on the corporate's tax. Here, taxes used to make the payment on…

Q: Why is the after tax cost of debt rather than the before tax cost used to calculate the weighted…

A: Weighted average cost of capital :  WACC or Weighted average cost of capital, as the name suggests,…

Q: three items that will reduce the amount owing by debtors.

A: In order to increase the sales revenue, the business organization sells their goods on a credit…

Q: Which of the following is not a source of informal short-term finance? *     A. Accrued wages   B…

A: Financing is an act or a process of providing funds to the business in order to operate the business…

Q: Does the management of long term assets benefit the business in anyway? Are there tax benefits as…

A: Assets  is a resource which has economic value and gives benefit to the company directly and…

Q: How can we summarize the firm's ability to meet debt repayment obligations?

A: Debt repayment obligations: It means the repayment obligation for the debt held by the corporation.…

Q: Using Miller (1977) personal income tax model to explain the impact of personal taxes due to income…

A: Personal tax rates on debt and equity securities are typically different. Debtholder’s main earning…

Q: he BEAR Company has 1,500 bonds outstanding that nave a market price of $990 each. floatation cost…

A: We  need to calculate yield to maturity using excel. Yield to maturity is considered as actual cost…

Q: Debt also can be an advantage. How can be a debt can be advantage?

A: Debt Financing:   It is the money borrowed by the business from outside sources. This source of…

Q: Define dividend tax penalty

A: Dividend tax is a tax paid by a company to government on behalf of the shareholders on the dividend…

Q: Which item of the income statement represents the taxable income of the firm?     EBIT…

A: Taxable income is the income after deducting all the expenses in the business, before applying tax…

Q: The most important non-cash item is a) Debt interest rate b) Income tax c) Dividend d) Depreciation

A: Answer

Q: The gain on early retire

A: Early retirement of bonds payable is where the bond holders are repaid before the maturity date.…

Q: On the part of the debtor, debt restructuring generally will result in Group of answer choices a.…

A: debt restructuring the process that can reduce the interest on the loan for extend the due date for…

Q: A) total debt - is that then the same as total liability? (just differently worded?) What is the…

A: The balance sheet of a company is an important financial statement that shows its assets,…

Q: Explain the concept of Tax Deduction in WACC. Does this tax deduction make debt finance Cheaper Then…

A: WACC is the weighted average cost of equity, cost of debt and cost of preference capital.

Q: ________ are long-term debt instrument that promise a fixed income in the form of interest.

A: Debt instrument is a way of financing which can guarantee a fixed income, hence a less risky…

Q: the purpose of grossing up of Interests in calculating taxable income from Int

A: Taxable income refers to the sum value of money gained by an entity on which the government implies…

Q: Using your own words, briefly (hopefully) explain: (a). What is "retained earning"? How does…

A: Profit earning is the main and basic motive of every firm or business. Businesses use these profits…

Q: Discuss how Floating and Fixed debentures affects the profitability of a business?

A: In floating debentures the interest rate of such debentures change will the level of changes... Such…

Q: a company can take advantage of long term de

A: Diversifies Capital Portfolio – semi permanent funding provides bigger flexibility and resources to…

Q: you mean by preference capital ? 2. What do you mean by fair value ? 3. What do you mean by the…

A: Money raised by the  company for business may be equity or debt or preference shares.

Q: What are pros and cons of raising money with debt? What is an alternative and why might some…

A: When a corporation generates funds by issuing debt instruments, this is known as debt financing.…

Q: The higher the debt level, the greater the burden borne by ___________ and the cost of debt.

A: The cost of debt is the rate a company pays on its debt