1. A firm has issued a bond. The bond has a 12% coupon, paid semiannually, a current maturity of 20 years, and sell for $1,171.59. The firm's marginal tax rate is 40%. What's the firm's after-tax component cost of debt?
5.0%
6.0%
7.0%
12%
2. You open a savings account on January 1, 2008 with $1,000. The interest rate stated on this account is 4%, compounded quarterly. What will your savings account be worth on December 31, 2012 assuming you made no deposits to or withdrawals from the account?
a. $1,220.19 4
b. $1,216.67
c. $1,240.41
d. $1,200.90
e. None of the above