If a Corporation Has an Average Tax Rate of 40

question 96

Multiple Choice

If a corporation has an average tax rate of 40 percent, the approximate, annual, aftertax cost of debtfor a 15-year, 12 percent, $1,000 par value bond, selling at $950 is

• A) 6.0 percent.
• B) 10 percent.
• C) 10.6 percent.
• D) 7.6 percent.

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Definitions:

Currency Exchange Rates

The value of one country's currency expressed in the units of another country's currency, used in the process of exchanging currencies between nations.

Equivalent Amount

A sum of money or value that is considered to be equal in worth or value to another.

First Column

The leftmost column in a spreadsheet or table, often containing the primary key or unique identifiers.

Basket of Goods

A representation of a fixed set of consumer products and services whose total cost is used to measure inflation.