The Shrieves Corporation has $10,000 that it plans to invest in marketablesecurities. It is choosing among AT&T bonds, which yield 7.5%, state of Florida muni bonds, which yield 5% (but are not taxable), and AT&T preferredstock, with a dividend yield of 6%. The corporate tax rate is 35%, and 70% ofthe dividends received are tax exempt. Find the after-tax rates of return on allthree securities.

Q: WACCSuppose that JB Cos. has a capital structure of 78 percent equity, 22 percent debt, and that its…

A: The provided information are: Weight of equity in capital structure (WE)= 78% = 0.78 Weight of debt…

Q: What is the company's federal income tax bill for the year? Enter your answer in dollars. For…

A: Federal Tax rate = 21% Taxable Income = $45 million Interest Income = $1 million

Q: Suppose that JB Cos. has a capital structure of 78 percent equity, 22 percent debt, and that its…

A: WACC refers to a firm's weighted average cost of capital. It is the rate that a firm  pays to its…

Q: Corporation X needs $1,000,000 and can raise this through debt at an annual rate of 6 percent, or…

A: Given information: Amount needed is $1,000,000 Interest rate on debt is 6% Annual cost of preferred…

Q: The capital structure of Bulldogs Inc. is comprised of 50% ordinary stock, 25% preferred stock, and…

A: Formula: Weighted Average Cost of Capital = (Cost of Ordinary Stock X Weighted of Ordinary Stock) +…

Q: he Wendt Corporation reported $45 million of taxable income. Its federal tax rate was 21% (ignore…

A: The amount of income needed to determine the taxes owing by an individual or a business is referred…

Q: ANB ltd has common equity of $35.5mn and $31.9mn of long-term debt and $10.3mn of preferred equity…

A: The weighted average cost of capital is the rate at which a corporation is anticipated to compensate…

Q: The board of directors of Wildhorse Corporation is considering two plans for financing the purchase…

A: Calculation of Interest on Bonds Interest on Bonds = Face Value of Bonds X Coupon rate Interest on…

Q: Targaryen Corporation has a target capital structure of 75 percent common stock, 10 percent…

A: Given information: Cost of equity is 10%, Cost of preferred stock is 6%, Pre-tax cost of debt is 7%,…

Q: First Bank has some questions as to the tax-free nature of $5 million of governmental bonds held in…

A: Income tax expense: The expenses which are related to the taxable income of the individuals and…

Q: Micro

A: Micro Advantage’s weighted-average cost of capital (WACC) is 14.96%.  Please see the attached…

Q: The board of directors of Blossom Corporation is considering two plans for financing the purchase of…

A: Bonds are trade-able assets that are issued by the companies. It provides a fixed interest rate to…

Q: Ninecent Corporation has a target capital structure of 60 percent common stock, 5 percent preferred…

A: Capital Weight Cost of capital before tax Common stock 60% 10% Preferred stock 5% 5% Debt 35%…

Q: Suppose that JB Cos. has a capital structure of 75 percent equity, 25 percent debt, and that its…

A: WACC is weighted Average cost of Capital shows the average cost of Capital obtained from the all…

Q: Capital Co. has a capital structure, based on current market values, that consist of 50% debt, 10%…

A:

Q: Ron Inc., who has an applicable 30% corporate tax as stated on its BIR tax registration form, is…

A: The debt ratio is the ratio that indicates the percentage of assets that the company provided by the…

Q: Corporation's after−tax cost of debt is​

A: Given information is: Times​ Corporation, whose tax rate is​ 30%, has two sources of​ funds:…

Q: Tencent Corporation has a target capital structure of 70 percent common stock, 5 percent preferred…

A: Given: Particulars Rate Weight Cost of equity 11.000% 70% Preference share cost 5.000% 5%…

Q: Suppose that TipsNToes, Inc.'s capital structure features 75 percent common equity, 25 percent debt,…

A: Equity ratio = 75% Debt ratio = 25% Cost of equity = 12% Before tax cost of debt = 10% Tax rate =…

Q: The capital structure of Bulldogs Inc. is comprised of 50% ordinary stock, 25% preferred stock, and…

A: Formula: Weighted Average Cost of Capital = (Cost of Ordinary Stock X Weightage of Ordinary Stock) +…

Q: rm Z, a corporation with a 21 percent tax rate, has $100,000 to invest in year 0 and two investment…

A: In decision making process, the investment with higher Net Present Value is selected.

Q: Picollo had after tax earnings of P5,000,000 in 2014. The company needs P5,000,000 for new…

A: According to residual dividend policy, dividend is paid when amount left after set aside the amount…

Q: Moss Inc. is considering issuing $1,000,000 worth of perpetual bonds yielding $60,000 interest per…

A: Bonds are financial instruments in which an investor lends money to a company or government for a…

Q: Whitlock & Daily Corporation has $350,000 that it wants to invest. It is choosing between Google…

A: Google corporate bonds yield=8.70 percent state of Texas municipal bonds  yield=5.72 percent…

Q: 1. Jorge Ricard, a fi nancial analyst, is estimating the costs of capital for the Zeale Corporation.…

A: Answer 1: Information Provided; Cost of debt = 4% Cost of equity = 6% Marginal Tax rate 20% 45%

Q: The Wendt Corporation had $10.5 million of taxable income.a. What is the company’s federal income…

A: The applicable tax rate for Wendt corporation is 35% or 0.35.

Q: David would like to organize HOS (a business entity) as either an S corporation or as a corporation…

A: Given Data:  Investment = $372,000  Return % = 12%  So EBIT = 12% * $372,000                  =…

Q: The Dakota Corporation had a 2021 taxable income of $20,000,000 from operations after all operating…

A: Tax refers to the amount charged by the government from the individual and companies on the income…

Q: Suppose that TipsNToes, Inc.'s capital structure features 55 percent common equity, 45 percent debt…

A: Weight of common equity = 0.55 Weight of debt = 0.45 Cost of equity = 0.14 Before tax cost of debt =…

Q: vanhoe Corporation has $310 million of debt outstanding at an interest rate of 9 percent. What is…

A: When a non-operating expense is deductible in the income statement, the amount of tax benefit from…

Q: Suppose that JB Cos. has a capital structure of 78 percent equity, 22 percent debt, and that its…

A: formula of wacc: wacc=we×re+wp×rp+wd×rd×1-tax where, we=weight of equitywd=weight of debtwp=weight…

Q: The Talley Corporation had taxable operating income of $425,000 (i.e., earnings from operating…

A: Tax is the liability which has to be paid by the individual and the corporation to the Federal…

Q: Moncton Meats is a corporation that earned $3 per share before it paid any taxes. The firm retained…

A: Amount of earnings distributed per share = (Earnings per share - Earnings per share x corporate tax…

Q: The Shrives Corporation has $10,000 that it plans to invest in marketable securities. It is choosing…

A: The debt instrument in which the company is required to pay the interest even in the year of losses…

Q: Delights, Inc., recently issued new securities to finance a new TV show. The project cost $35…

A: Capital StructureThe combination of both debts and of equity that is being utilized by an entity for…

Q: Healthy Snacks, Inc. has a target capital structure of 55 percent common stock, 5 percent preferred…

A: Given that, Cost of equity (Ke) = 14.3% Cost of preferred stock (Kp) = 8.9% Pretax cost of debt (Kd)…

Q: Ninecent Corporation has a target capital structure of 75 percent common stock, 10 percent preferred…

A: WACC is the weighted average cost of capital. It is the average cost of raising funds/capital from…

Q: Paints plans to issue a $1,000 par value, 20 year noncallable bond with a 7% annual coupon paid…

A:

Q: Tencent Corporation has a target capital structure of 70 percent common stock,5 percent preferred…

A: Particulars Rate Weight Cost of equity 11.000% 70% Preference share cost 5.000% 5% Cost of…

Q: he Wendt Corporation reported $30 million of taxable income. Its federal tax rate was 21% (ignore…

A: Tax refers to compulsory payment made to government of country. In order to earn in country,…

Q: Gainer Company has three sources of financing: $3 million of mortgage bonds paying 5 percent…

A: After-Tax Cost for Mortage bonds = Interest rate x (1 - tax rate) = 5% x (1-0.40) = 3% After-Tax…

Q: Gainer Company has three sources of financing: $3 million of mortgage bonds paying 5 percent…

A: Mortgage bonds value=3000000 cost of bond=5% after tax=r1=5(1-0.4)=3% weighted…

Cash and Liquid Asset Management

Cash management is the process of controlling cash inflow & cash outflow, managing the cashflows inside the business, and utilizing the cash for business operation at any point in time. A business has to maintain a certain level of cash to meet various financial obligations. Cash management is essential because businesses must utilize the cash to generate maximum profit. Cash management also ensures to maintain maximum liquidity in the business.