Again, note that the actual state rate is reduced by 25% to allow for the deductibility of state income taxes on the federal income tax return. If Dana’s state tax rate increases to 10%, corporate bonds are still superior to Treasury bonds. 50. [LO 1] At the beginning of his current tax year David invests $12,000 in original issue U.S. Treasury bonds with a $10,000 face value that mature in exactly 10 years. David receives $700 in interest ($350 every six months) from the Treasury bonds during the current
What amount should Ruiz record on March 1, 2010 as paid-in capital from stock warrants? (Points : 4) $28,800 $33,600 $41,600 $40,000 3. (TCO A) On January 1, 2010, Trent Company granted Dick Williams, an employee, an option to buy 100 shares of Trent Co. stock for $30 per share, the option exercisable for 5 years from date of grant. Using a fair value option pricing model, total compensation expense is determined to be $900. Williams exercised his option on September 1, 2010, and sold his 100 shares on December 1, 2010.
The ROE for Sepracor is 33.07%, which means that 33.07 cents of assets are created for each dollar that was originally invested. It measures how Sepracor is using its money. The higher the return on equity, the more funds available to be invested in improving business operations without having to invest more capital. Debt to asset ratio measures the company’s solvency, and the higher the ratio, the lower the borrowing capacity for the company. I would make an investment in the company’s 5% convertible bonds.
| Math 103 Final Project – Parts 1, 2, and 3 | | | Math 103 Instructor: Toni Robertson December 11, 2010 Math 103 Instructor: Toni Robertson December 11, 2010 Part 1: 1a. What is the shortest loan (36 months, 48 months, 60 months or 72 months) that has a monthly payment within your $500 budget that will allow you to buy the $15,000 car? Answer: Through Bank of America, I found a rate of 2.99% for the 36, 48 and 60 month loans. We are able to put down 20% and will need to finance $12,000. The shortest loan period for the $15,000 car that would be under our $500 limit is the 36 month loan at a rate of $348.93 per month.
The parent receives annual dividends from the subsidiary of $2,500,000. If the parent's marginal tax rate is 34% and if the exclusion on intercompany dividends is 70%, what is the effective tax rate on the intercompany dividends, and how much net dividends are received? Question 20 New York Waste (NYW) is considering refunding a $50,000,000, annual payment, 14% coupon, 30-year bond issue that was issued 5 years ago. It has been amortizing $3 million of flotation costs on these bonds over their 30-year life. The company could sell a new issue of 25-year bonds at an annual interest rate of 11.67% in today's market.
In total it will be $74,295; since the investors paid $80,000 the yield rate is less than 8%. As for the correctness of the $748 first year bond discount amortization, the calculation follows: Since the bond proceeds were $80,000 and the true yield is 7.23% per year. 7.23% came from the interest table that I have. Then for Year 1 net interest should be $80,000*.0723 =$5784. But the stated interest payment is $5,000, thus the $784 interest expense is amortization of the bond discount.
The depreciation charges start from 2008. WPC make 15% as the hurdle rate for this investment. The treasury bonds yielding 10%, whereas currently yielding is less than 5%. Financial Analysis (1) Shares outstanding: 500 million. Market value per share: $24 So, total equity: 500 million*$24=$12,000 million (2) Total debt= long term debt=$2500 million (3) Proportion of Equity: E(D+E)=$12,000million($2500million+$12,000million)=0.83 Proportion of Debt: D(D+E)=$2500million($2500million+$12,000million)=0.17 (4) Cost of Equity: CAPM: E(Ri)=Rf+βi*(Rm-Rf)= 4.6%+1.10*6%=4.6%+6.6%=11.2% (5) Rate of bank loan payable: 5.38%+1%=6.38%.
Use the following to answer questions 4-5: The following information has been provided by the Evans Retail Stores, Inc., for the first quarter of the year: Sales $350,000 Variable selling expense 35,000 Fixed selling expenses 25,000 Cost of goods sold (variable) 160,000 Fixed administrative expenses 55,000 Variable administrative expenses 15,000 4. The gross margin of Evans Retail Stores, Inc. for the first quarter is: A) $210,000. B) $140,000. C) $220,000. D) $190,000.
At this price, the bonds yield 11.8 percent. The coupon rate on the bonds is percent. (Do not include the percent sign (%). Round your answer to 1 decimal place. (e.g., 32.1)) | Ackerman Co. has 10 percent coupon bonds on the market with sixteen years left to maturity.
Week 2 Practice Question Solutions EXERCISE 4-8 (15–20 minutes) (a) Net sales $ 540,000 Cost of goods sold (210,000) Administrative expenses (100,000) Selling expenses (80,000) Discontinued operations-loss (40,000) Income before income tax 110,000 Income tax ($110,000 X .30) 33,000 Net income $ 77,000 (b) Income from continuing operations before income tax $150,000* Income tax ($150,000 X .30) 45,000 Income from continuing operations 105,000 Discontinued operations, less applicable income tax of $12,000 (28,000) Net income $ 77,000 *$110,000 + $40,000 Earnings per share: Income from continuing operations