Homework Answers
After-tax cost of debt is the cost of debt before tax multiplied by *(1-tax rate) ie
After-tax cost of debt=Before tax cost of debt*(1-tax rate)
Hence the correct option is A.
Add Answer to:
The after-tax cost of debt is found by: O A. multiplying the before-tax cost of debt...
David Abbot is interested in purchasing a bond Before-tax cost of debt and after-tax cost of...
David Abbot is interested in purchasing a bond Before-tax cost of debt and after-tax cost of debt Personal Finance Problem issued by Sony. He has obtained the following information on the security: Sony Bond Par value $1000 Coupon interest rate 6.5% Cost $930Years to maturity 10 Corporate tax rate 20% Answer the following questions: a. Calculate the before-tax cost of the Sony bond using the bond's yield to maturity (YTM) b. Calculate the after-tax cost of the Sony bond given...
To calculate the after-tax cost of debt, multiply the before-tax cost of debt by (1-T) Omni Consumer Products Comp...
To calculate the after-tax cost of debt, multiply the before-tax cost of debt by (1-T) Omni Consumer Products Company (OCP) can borrow funds at an interest rate of 10.20 % for a period of eight years. Its marginal federal-plus-state tax rate is 25 %. OCP's after-tax cost of debt is (rounded to two decimal places). 8.80% At the present time, Omni Consumer Products d OP) has 20-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds...
After-tax cost of debt. Given the following: Yield to maturity (Before tax cost of debt) =...
After-tax cost of debt. Given the following: Yield to maturity (Before tax cost of debt) = 12% Tax Rate = 40% Please calculate the after-tax cost of debt.
To calculate the after-tax cost of debt, multiply the before-tax cost of debt by (1-T) Western...
To calculate the after-tax cost of debt, multiply the before-tax cost of debt by (1-T) Western Gas & Electric Company (WGC) can borrow funds at an interest rate of 9.70% for a period of five years. Its marginal federal-plus-state tax rate is 25%. WGC's after-tax cost of debt is (rounded to two decimal places). At the present time, Western Gas & Electric Company (WGC) has 15-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have...
What is the WACC for Bacon Signs Inc, if the after-tax cost of long-term debt is...
What is the WACC for Bacon Signs Inc, if the after-tax cost of long-term debt is 6.3% and the before tax cost of equity is 10.4%? a. 8.02% b. 8.91% c. 9.58% d. Without a corporate tax rate, we cannot answer this question as written.
PROBLEMS 11. (After-tax COST O CARTAL 210 After-tax cost of debt Calculate the after-tax c ode...
PROBLEMS 11. (After-tax COST O CARTAL 210 After-tax cost of debt Calculate the after-tax c ode under each of the following con A tax rate of 37, and a yield to maturity of 754 b. A tax rate 125, and a pre-tax cost of debt of 102 A tax rate of O, and a yield to maturity of 79 After-tax cost of debt) Melbourne, Inc. currently has 3 bonds with a to maturity of in the 35% marginal tax rate,...
To calculate the after-tax cost of debt, multiply the before-tax cost of debt by Western Gas...
To calculate the after-tax cost of debt, multiply the before-tax cost of debt by Western Gas & Electric Company (WGC) can borrow funds at an interest rate of 11.10% for a period of four years. Its marginal federal-plus-state tax rate is 40%. WGC's after-tax cost of debt is (rounded to two decimal places). At the present time, Western Gas & Electric Company (WGC) has 20-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a...
To calculate the after-tax cost of debt, multiply the before-tax cost of debt by Omni Consumer...
To calculate the after-tax cost of debt, multiply the before-tax cost of debt by Omni Consumer Products Company (OCP) can borrow funds at an interest rate of 7.30% for a period of four years. Its marginal federal-plus-state tax rate is 45%. OCP's after-tax cost of debt is (rounded to two decimal places). At the present time, Omni Consumer Products Company (OCP) has 5-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market...
1. The after-tax cost of debt is higher than the before-tax cost of debt. True or...
1. The after-tax cost of debt is higher than the before-tax cost of debt. True or False 2. The constant dividend growth model and CAPM are two ways of estimating a firm's cost of equity. True or False 3. The cost of capital uses the amounts of total assets and debt as the capital structure weights. True or False 4. In deriving the WACC, market values are preferred over book values for the capital structure weights. True or False 5....
2. An overview of a firm's cost of debt To calculate the after-tax cost of debt,...
2. An overview of a firm's cost of debt To calculate the after-tax cost of debt, multiply the before-tax cost of debt by (1-1) Western Gas & Electric Company (WGC) can borrow funds at an interest rate of 12.50% for a period of six years. Its marginal federal-plus-state tax rate is 25%. WGC's after-tax cost of debt is 9.38% (rounded to two decimal places). At the present time, Western Gas & Electric Company (WGC) has 15-year noncallable bonds with a...
David Abbot is interested in purchasing a bond Before-tax cost of debt and after-tax cost of debt Personal Finance Problem issued by Sony. He has obtained the following information on the security: Sony Bond Par value $1000 Coupon interest rate 6.5% Cost $930Years to maturity 10 Corporate tax rate 20% Answer the following questions: a. Calculate the before-tax cost of the Sony bond using the bond's yield to maturity (YTM) b. Calculate the after-tax cost of the Sony bond given...
To calculate the after-tax cost of debt, multiply the before-tax cost of debt by (1-T) Omni Consumer Products Company (OCP) can borrow funds at an interest rate of 10.20 % for a period of eight years. Its marginal federal-plus-state tax rate is 25 %. OCP's after-tax cost of debt is (rounded to two decimal places). 8.80% At the present time, Omni Consumer Products d OP) has 20-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds...
To calculate the after-tax cost of debt, multiply the before-tax cost of debt by (1-T) Western Gas & Electric Company (WGC) can borrow funds at an interest rate of 9.70% for a period of five years. Its marginal federal-plus-state tax rate is 25%. WGC's after-tax cost of debt is (rounded to two decimal places). At the present time, Western Gas & Electric Company (WGC) has 15-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have...
PROBLEMS 11. (After-tax COST O CARTAL 210 After-tax cost of debt Calculate the after-tax c ode under each of the following con A tax rate of 37, and a yield to maturity of 754 b. A tax rate 125, and a pre-tax cost of debt of 102 A tax rate of O, and a yield to maturity of 79 After-tax cost of debt) Melbourne, Inc. currently has 3 bonds with a to maturity of in the 35% marginal tax rate,...
To calculate the after-tax cost of debt, multiply the before-tax cost of debt by Western Gas & Electric Company (WGC) can borrow funds at an interest rate of 11.10% for a period of four years. Its marginal federal-plus-state tax rate is 40%. WGC's after-tax cost of debt is (rounded to two decimal places). At the present time, Western Gas & Electric Company (WGC) has 20-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a...
To calculate the after-tax cost of debt, multiply the before-tax cost of debt by Omni Consumer Products Company (OCP) can borrow funds at an interest rate of 7.30% for a period of four years. Its marginal federal-plus-state tax rate is 45%. OCP's after-tax cost of debt is (rounded to two decimal places). At the present time, Omni Consumer Products Company (OCP) has 5-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market...
2. An overview of a firm's cost of debt To calculate the after-tax cost of debt, multiply the before-tax cost of debt by (1-1) Western Gas & Electric Company (WGC) can borrow funds at an interest rate of 12.50% for a period of six years. Its marginal federal-plus-state tax rate is 25%. WGC's after-tax cost of debt is 9.38% (rounded to two decimal places). At the present time, Western Gas & Electric Company (WGC) has 15-year noncallable bonds with a...
Most questions answered within 3 hours.
-
You place a block of
ice (mass of 3 kg) into a test chamber filled with...
asked 40 minutes ago -
If a benzene ring has one -CF3 group as a
substituent, will the next substituent add...
asked 17 minutes ago -
CORPORATE FINANCE
STATEMENT: If the total risk of a stock is high you can
expect the...
asked 8 minutes ago -
Which of the following is true?
Select one:
a. The existence of generally accepted accounting principles...
asked 8 minutes ago -
What are the three characteristics of traditional "neighbor
ethics" that Jonas isolates, and in what respects...
asked 10 minutes ago -
According to the manufacturer of a certain candy, 9% of the
candy produced are red. If...
asked 11 minutes ago -
A rectangular block that is 0.6m wide, 0.6m long and 1.2m high
stands on a horizontal...
asked 18 minutes ago -
3. Assume that a mining company that produces ore sells its
product for $40 per ton....
asked 12 minutes ago -
A near sighted person wears corrective glasses made of a
diverging lens with a focal length...
asked 13 minutes ago -
You work for several accountants who are hosting a public
seminar on recent changes to tax...
asked 30 minutes ago -
A Eucher Deck consists of 24 cards. In a four- player game, each
player is dealt...
asked 28 minutes ago -
Describe and draw the mechanism for the formation of the
Grignard reagent with 2-bromopropane as the...
asked 43 minutes ago