Calculating the Cost of Debt $[\mathrm{LO} 2]$ Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. If the corporate tax rate is $22$ percent, what is the aftertax cost of the company's debt?

Bond	Coupon Rate	Price Ouote	Maturity	Face Value
1	$5.00\%$	$103.18$	$5$ years	$\$45,000,000$
2	$7.10$	$112.80$	$8$ years	$40,000,000$
3	$6.30$	$107.45$	$15(1)/(2)$ years	$50,000,000$
4	$5.90$	$102.75$	$25$ years	$65,000,000$

Suspect Company issued $600,000 of 9 percent first mortgage bonds on January 1, 20X1, at 103. The bonds mature in 20 years and pay interest semiannually on January 1 and July 1 . Prime Corporation purchased$400,000 of Suspect's bonds from the original purchaser on January 1, 20X5, for $396,800. Prime owns 60 percent of Suspect's voting common stock.

Required

Prepare the worksheet consolidation entry or entries needed to remove the effects of the inter-corporate bond ownership in preparing consolidated financial statements for$20 $\mathrm{X}$ 5$.

Suspect Company issued $600,000 of 9 percent first mortgage bonds on January 1, 20X1, at 103. The bonds mature in 20 years and pay interest semiannually on January 1 and July 1. Prime Corporation purchased$400,000 of Suspect's bonds from the original purchaser on December 31, 20X5, for $397,000. Prime owns 60 percent of Suspect's voting common stock.

Required

Prepare the worksheet consolidation entry or entries needed to remove the effects of the inter-corporate bond ownership in preparing consolidated financial statements for 20X6.

What are some characteristics of a formal corporate culture?

What are the best corporate bonds to buy now?

How are savings bonds different from a corporate bond?

"Average corporate tax rates Using the corporate tax rate schedule given in Table 2.1, perform the following:

a. Calculate the tax liability, after-tax earnings, and average tax rates for the following levels of corporate earnings before taxes: $10,000;$80,000; $300,000;$500,000; $1.5 million;$10 million; and $20 million."

How are unsecured corporate bonds known?

The CEO of the Consolidated Hands of Help, a nonprofit New York Corporation, was shown to be using corporate funds to maintain several limos and various houses for himself around the country. He responded that he needed these to enable him to better recruit donors. The board of directors agreed with his position. A shareholder brought suit claiming that more than 12,000 homeless people could be helped for what was being paid for the luxury items. The suit sought to recover the expenditures from the CEO and the board members. Will it be successful? Why or why not?

$\text{\blue{WHAT IF?}}$ Lab tests of two patients, each diagnosed with excessive thyroid hormone production, revealed an elevated level of TSH in one but not the other. Was the diagnosis of one patient necessarily incorrect? Explain.

What resources was Japan looking for when it attacked Southeast Asia? What dilemma did Japan face?

Molly is a 75-year-old widow who lives alone. For 2 days, she had a fever and chills and mainly stayed in bed. On rising to go to the bathroom, she felt dizzy, fainted, and fell to the floor. Molly quickly regained consciousness and managed to call her son, who took her to the emergency room, where a physician diagnosed orthostatic hypotension. Orthostasis literally means “to stand,” and hypotension refers to low blood pressure; thus, orthostatic hypotension is a significant drop in blood pressure upon standing. When a person moves from lying down to standing, blood “pools” within the veins below the heart because of gravity, and less blood returns to the heart. Consequently, blood pressure drops because the heart has less blood to pump.

Although orthostatic hypotension has many causes, in the elderly it can be due to age-related decreases in neural and cardiovascular responses. Decreased fluid intake while feeling ill and sweating due to a fever can result in dehydration. Dehydration can decrease blood volume and lower blood pressure, increasing the likelihood of orthostatic hypotension.

How did Molly’s fainting and falling to the floor help establish homeostasis (assuming she was not injured)?

Who is responsible for overseeing corporate activities?

Javier volunteers in community events each month. He does not do more than five events in a month. He attends exactly five events 35% of the time, four events 25% of the time, three events 20% of the time, two events 10% of the time, one event 5% of the time, and no events 5% of the time. What values does x take on?