Jarrod is a college student. All of Jarrod's disposable income is used to pay his college-related expenses. While he has no liabilities (Jarrod is on a scholarship), he does have a credit card that he typically uses for emergencies. He and his friend went on a shopping spree in New York City costing $2,000, which Jarrod charged to his credit card. Jarrod has $20 in his wallet, but his bank accounts are empty. Jarrod has an old TV worth about $100. Jarrod's other assets total about $150.

What is Jarrod's debt-to-asset ratio? What does this indicate about Jarrod's financial position?

Jarrod's debt-to-asset ratio is: (Select the best answer below.)

A. 74.07 percent, which indicates that if Jarrod loses his job, he would not be able to pay off his debt.
B. 0.74 percent, which indicates that if Jarrod loses his job, he would not be able to pay off his debt.
C. 0.0014 percent, which indicates that if Jarrod loses his job, he would not be able to pay off his debt.
D. 740.74 percent, which indicates that if Jarrod loses his job, he would not be able to pay off his debt.

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

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Dan wants to start a supermarket in his hometown, and wants to get into the business only after finding out about the market and how successful his business might be. the best way for dan to gain knowledge is to: