How any company is taking tax advantage of bonds payable or any other fixed cost financing?

Q: What are the special tax features of (a) Treasury securities, (b) agency issues, and (c) municipal…

A: (a): Treasury securities - Interest paid on all types of treasury securities will be fully taxable…

Q: How can we determine the after-tax cost of debt?

A: Cost of capital is the overall cost of financing the funds from all sources of finance. The cost of…

Q: Account for corporate income taxes; explain the effects of these taxes onbefore-tax profits and…

A: Corporate income taxes are taxes paid by companies on their income

Q: How can we determine Corporate Taxes?

A: Definition: Corporate taxes are the source of income for the government or the nation which is…

Q: How does our tax system influence the use of debt financing by corporations?

A: Answer: If a company uses debt financing, it will pay interest while if it uses stock, dividends are…

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: How to Determine Corporate Taxes

A: Corporate taxes are the source of income for the government or the nation which is imposed by the…

Q: Distinguish between public and private corporate debt.

A: Debt is the amount of loan that is borrowed and it is repaid along with the interest.

Q: Who are the major purchasers of “regular” preferred stock? How do tax considerationsaffect these…

A: Stocks are the company’s shares which the company issues to its shareholders to raise funds and…

Q: What is Debt financing? What are the major sources of corporate financing?

A: Corporate finance is the domain of finance concerned with how companies cope with financing sources,…

Q: Define the term Corporate taxable income?

A: Definition: A corporate tax is a type of direct tax that is levied by the state on the income of a…

Q: How company  take tax advantage of Bonds Payable

A: A bond is a financial instrument which is issued by an entity with the intention to re-pay the…

Q: Understand the estimate tax payment obligations of corporations.

A: Tax Obligation refers to a taxpayer's legal obligation under the tax code to compute the tax…

Q: Explain the advantages and disadvantages of the use of debt to a company

A: Debt - Debt is a source of fund to a company on which company pay an annual fixed payment. and that…

Q: Which of the following statements is true? O Interest on bonds is not tax deductible O Interest on…

A: Bonds should be repaid back at maturity  perios

Q: How a company takes tax advantage of Bonds Payable (or any other fixed cost financing)?

A: Giving securities is one path for organizations to fund-raise. A bond capacities as a credit between…

Q: Identify the following as either an advantage (A) or a disadvantage (D) of bond financing for a…

A: Bonds payable: Bonds payable are referred to long-term debts of the business, issued to various…

Q: How can the yield to maturity on a firm’s outstanding debt be used to estimate itsbefore-tax cost of…

A: A yield to maturity or YTM shows the return an investor gets by holding the bond till its maturity…

Q: what are major categories of debt and stock for a corporation.

A: Several businesses and people employ debt to finance major purchases that they would not be able to…

Q: Should preference shares be disclosed as ‘equity’ or as ‘debt’?

A: Note: Since you have posted multiple questions, we will solve the first question. Please submit a…

Q: How do you calculate the relative advantage of the debt given the highest corporate tax rate, the…

A: Relative Tax Advantage is tax savings made by firm by having debt in their capital structure and…

Q: What are municipal bonds? What characteristics makes them especially attractive to high-income…

A: The state government issues municipal bonds. They can be thought of as a risk-free investment…

Q: Discuss the percentage tax applicable to Banks and Non-bank financial intermediaries.

A: As defined by Sections 116 to 127 of the Internal Revenue Code of 1997 (also known as the Tax Code),…

Q: How does the deductibility of interest and dividends by the paying corporation affect thechoice of…

A: A way to finance the capital requirement by the category of ownership in a company that has the last…

Q: l financing affects tax liability

A: Step 1 Debt financing is well regulated under U.S. tax law. Businesses can deduct interest payments…

Q: How does a corporations debt differ from its equit

A: Following are the differences between corporation debt and its equity: Debt is the fund borrowed…

Q: What is the difference in the tax treatment of interest anddividends paid by a corporation? Does…

A: Introduction: Usually, dividend is nothing but, sharing a portion of profits of the corporation, as…

Q: Series EE bonds are: OU.S, savings bonds that produce income that may be exempt from some taxes.…

A: The EE Bond Series (commonly referred to as the "Patriot Bond") is a U.S. government bond that can…

Q: Why is the after-tax cost of debt rather than the before-tax cost used to calculate the WACC?

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

Q: Briefly explain the income tax advantage of raising capitalby issuing bonds rather than by selling…

A: The most important difference between bonds and the capital stock is the difference in the tax…

Q: Define after-tax cost of cost of debt

A: The amount that is raised by the company by issuing the bonds or borrowing from the financial…

Q: How will investors maximize the returns of corporatebonds or redeem their corporate bonds?

A: Corporate bond is defined as the bond, which is used to issue through the company for increasing the…

Q: Taxes affect many financial decisions. Explain how (a)interest and dividend payments are treated for…

A: a. From the company’s perspective, Interest and dividend payment reduce the tax liability of the…

Q: compute for the after tax cost of debt.

A: 12   Calculate cost of equity using CAPM model as shown below:     Cost of equity Risk free…

Q: how company's financial statement reflects the potential tax avoidance? For example?

A:

Q: What’s a muni bond, and how are these bonds taxed?

A: Municipal bonds also known as muni bonds are defined as debt securities which are issued by a…

Q: Explain how an investor in an equity REIT may receive a current dividend, part of which may be…

A: Introduction: Equity REITs requires a direct investment in restaurants, shopping malls and office…

Q: Which mathematial expression is used to calculate the after tax cost of debt?

A: Cost of debt: Cost of debt is the effective rate of interest that the firm pays on its present…

Q: What is the relative tax advantage of debt when corporate and personal taxes are considered?

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: From what sources might a corporation obtain funds through long-term debt?

A: Long term debt are  those debt which mature or repaid after more than one year. The long term debt…

Q: What will be the Effect of Interest Rates on the After Tax IRR on Equity?

A: "Financial leverage is a double edged sword". If the company is not managing its financial resources…