5. Your client would like a $1.5 million life insurance policy with the following relevant information:  Premium is $18,500 per year
 Expected dividends per year: $1,600
 Cash value 10 years from now: $40,000
 Discount rate: 5%

a. Given this information, compute the Net Cost of the policy over the next 10 years. Compute the cost per year, per $1,000 of coverage. (3 points)

b. Compute the policy’s Interest-Adjusted Cost over the next 10 years, per year, per $1,000 of coverage. (4 points)

c. Suppose the cash value at the end of the most recent (previous) year is $3,700, and the cash value at the end of the current year will be $7,000. Compute the policy’s cost per $1,000 of coverage using the Benchmark Method. (4 points)

Afirm's before-tax cost of debt, rd, is the interest rate that the firm must pay on debt. because interest is tax deductible, the relevant cost of debt used to calculate a firm's wacc is the cost of debt, rd (1 – t). the cost of debt is used in calculating the wacc because we are interested in maximizing the value of the firm's stock, and the stock price depends on cash flows. it is important to emphasize that the cost of debt is the interest rate on debt, not debt because our primary concern with the cost of capital is its use in capital budgeting decisions. the rate at which the firm has borrowed in the past is because we need to know the cost of capital. for these reasons, the on outstanding debt (which reflects current market conditions) is a better measure of the cost of debt than the . the on the company's -term debt is generally used to calculate the cost of debt because more often than not, the capital is being raised to fund -term projects. quantitative problem: 5 years ago, barton industries issued 25-year noncallable, semiannual bonds with a $1,600 face value and a 8% coupon, semiannual payment ($64 payment every 6 months). the bonds currently sell for $845.87. if the firm's marginal tax rate is 40%, what is the firm's after-tax cost of debt? round your answer to 2 decimal places. do not round intermediate calcu

Abank has $132,000 in excess reserves and the required reserve ratio is 11 percent. this means the bank could have in checkable deposit liabilities and in (total) reserves.

Later movers do not face: entrenched competitors. reduced uncertainty over technologies. high growth markets. lower market uncertainty.