The Outstanding Debt of Berstin Corp

question 8

Multiple Choice

The outstanding debt of Berstin Corp.has ten years to maturity,a current yield of 7%,and a price of $95.Assume the debt has a face value of $100.What is the pretax cost of debt if the tax rate is 30%.

• A)4.9%
• B)6.5%
• C)7.0%
• D)7.37%
• E)8.15%

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Definitions:

Two-Factor Theory

A psychological theory that proposes motivation and job satisfaction are influenced by two factors: hygiene factors and motivators.

Working Conditions

The environment in which employees operate, which includes physical setup, hours, safety measures, and any other job-related conditions.

Job Dissatisfaction

A negative emotional state resulting from the appraisal of one’s job as frustrating, unsatisfying, or in some way not up to an individual's expectations.

Acquired Needs Theory

A motivational theory suggesting that people's needs are shaped over time by their life experiences, influencing their behavior and performance.