XLtd has taken a term loan of Rs12 lakhs at an interest rate of 15% p.a. If the tax rate applicable to the company is 40%, the cost of term loan is

Related MCQs

• A firm has a capital of Rs. 10 lakhs, sales of Rs. 5 lakhs, gross profit of Rs. 2 lakhs and expenses of Rs. 1 lakh. The Net Profit Ratio is:
• PAT of a company Rs. 100 lakhs and number of equity shares of Rs. 10 each with a capital of Rs. 50 lakhs, then EPS is:
• Investment in a project is Rs. 200 lakhs and Net Present Value is Rs. 50 lakhs. Then the amount of inflows is :
• Present value of inflows Rs. 10 lakhs from a project and initial investment is Rs. 7.5 lakhs. The NPV is:
• The cost of debt capital if interest rate is 15% and tax rate is 40% is
• The type of debt whose rate of interest changes according to the changes in the rate of interest payable on gilt edged securities or the prime lending rate of the bank is called
• In MM Model with taxes, where 'r' is the interest rate, ‘D’ is the total debt and 't' is tax rate, then present valued shields would be:
• Lei-Feng, Inc.'s $100 par value preferred stock just paid its $10 per share annual dividend. The preferred stock has a current market price of $96 a share. The firm's marginal tax rate (combined federal and state) is 40 percent, and the firm plans to maintain its current capital structure relationship into the future. The component cost of preferred stock to Lei-Feng, Inc. would be closest to .
• A company has earnings before interest and taxes of Rs1,00,000. It expects a return on investment at a rate of 12.5%. What is the total value of the firm according to MM Theory?
• Tax-rate is relevant and important for calculation of specific cost of capital of: