A company is issuing a 15-year bond with 12 percent coupon rate, $1,000 par value, $970 selling price, $20 flotation cost. If the corporate tax rate is 21 percent, what is the after - tax cost of debt?
A company is issuing a 15-year bond with 12 percent coupon rate, $1,000 par value, $970 selling price, $20 flotation cost. If the corporate tax rate is 21 percent, what is the after - tax cost of debt?
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter11: Determining The Cost Of Capital
Section: Chapter Questions
Problem 14P
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