1. How should interest be prorated on a loan that has $80,000 outstanding and closing occurs on the 14th day of March? Suppose the interest rate is 6.00%.
2. List 3 key components you would consider in making an investment decision. What sources and factors would you review?
3. The June Bug has a $720000 bond issue outstanding. These bonds have a 10.7 percent coupon, pay interest semiannually, and have a current market price equal to 103 percent of face value. The tax rate is 36 percent. What is the amount of the annual interest tax shield?