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I will pay for the following essay Finance assignment1. The essay is to be 9 pages with three to five sources, with in-text citations and a reference page.644003600028400Since the least payment to be
I will pay for the following essay Finance assignment1. The essay is to be 9 pages with three to five sources, with in-text citations and a reference page.
64400
36000
28400
Since the least payment to be paid by Alresford to Gibson under third option, i.e., 28400, it is advisable to go ahead with third option.
(d) Under Imputation system, the tax payable by the company is deductible for the tax computation of shareholders.
The imputation system, when the company's tax is avoided the calculation will be as follows:
Operating cash flow
north
south
total
cost of capital
market value
12000
12000
24000
18%
4320
12000
8000
20000
18%
3600
16000
8000
24000
18%
4320
20000
4000
24000
18%
4320
PART B
The Cost and Benefits of Debt
Introduction
Among the various sources of capital, debt is an important and popular source of long term fund for small as well as big firms. Other sources include equity and preference shares and retained earnings. Debt is a long term arrangement with a lender by a company to avail finance on a certain set of conditions. The lender may be banks and financial institutions, public, and other corporations issuing debt securities. The company can avail debt capital in various forms such as bonds, long term loans from banks and financial institutions etc. Bond is the most common form of debt security issued by a corporation. Bonds are issued by governments also in time of financial crisis. Debt is the least cost and hence the most popular source of capital for corporations. In addition to that it has many advantages. As bonds are the common form of debt capital, bonds and debt are often used interchangeably. Moreover, the attributes of bonds as a source of long term capital are similar to any other debt capital. Therefore, the following discussion of cost and benefits of debt is common to bonds and long term loans.
