Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:Royal Jewelers Inc. has an aftertax cost of debt of 12.45 percent. With a tax rate of 40 percent, what can you assume the yield on the
debt is? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
Yield
%
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it say all answers above are incorrect, i need the yield on the debt percentage plz and thank u
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it say all answers above are incorrect, i need the yield on the debt percentage plz and thank u
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- Leverage is gained when which of the following exists? O Return on assets is greater than the interest on borrowed funds O Interest coverage ration is greater than 1 O Interest coverage ratio is less than 1% O Interest on borrowed funds is greater than the return on assetsarrow_forwardCompared to junior unsecured debt, subordinated debt exhibits __________ credit risk, __________ yield, and __________ recovery rate. A. lower / lower / higher B. higher / higher / lower C. higher / lower / lower D. lower / higher / lowerarrow_forwardThe additional debt capacity depends on the interest rate and /or maturity term. If interest rate is fixed, the longer maturity will _______ the additional debt capacity.arrow_forward
- Explain FOUR (4) reasons that influence the changes which make debt security yields vary. Please giveexplanation in details with example.arrow_forwardhow did you get the yield on debtarrow_forward10. The carrying value of available-for-sale debt and equity securities is a. historical costb. the current market valuec. the lower of cost or current market valued. the higher of cost or current market valuearrow_forward
- 1. True or false. Rate of return is the interest earned on the unpaid balance of an amportized loanarrow_forwardblank options are margins, payment caps, points, variable investmentsarrow_forwardIn the era of inflation, if This leads to achieving holding losses O a. Monetary assets > monetary liabilities Monetary assets = monetary liabilities Non-monetary assets > non-monetary liabilities O b. O c. O d. Monetary assets < monetary liabilities.arrow_forward
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