The Telescoping Tube Company Is Planning to Raise $2,500,000 in Perpetual

question 16

Multiple Choice

The Telescoping Tube company is planning to raise $2,500,000 in perpetual debt at 11% to finance part of their expansion. They have just received an offer from the Albanic County Board of Commissioners to raise the financing for them at 8% if they build in Albanic County. What is the total added value of debt financing to Telescoping Tube if their tax rate is 34% and Albanic raises it for them?

• A) $850,000
• B) $1,300,000
• C) $1,200,000
• D) $1,650,000

Understand the concepts and purposes of retainers, disbursements, and managing financial discrepancies in legal services.

Recognize the ethical standards and professional responsibilities expected of legal professionals.

Understand ethical decision-making in the business environment.

Describe the characteristics of a sophisticated client.

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Definitions:

Contributory

Involving or denoting a pension, insurance plan, or other benefit scheme where both employers and employees make payments towards the cost.

CPP/QPP

Refers to Canada Pension Plan/Quebec Pension Plan, which are public pension plans in Canada designed to provide income for workers upon retirement.

RRSPs

Registered Retirement Savings Plans, a type of financial account in Canada for holding savings and investment assets to support retirement.

Reduced Pension

A retirement plan that provides beneficiaries with lower benefits than originally anticipated or agreed upon.