If a corporation has an average tax rate of 40 percent, the approximate annual, after-tax cost of debt for a 10-year, 8 percent coupon, 3% floatation costs, $1,000 par value semiannual bond selling at $1,150 is ________. A) 3.18 percent B) 6.36 percent C) 3.82 percent D) 6.59 percent

If a corporation has an average tax rate of 40 percent, the approximate annual, after-tax cost of debt for a 10-year, 8 percent coupon, 3% floatation costs, $1,000 par value semiannual bond selling at $1,150 is ________. A) 3.18 percent B) 6.36 percent C) 3.82 percent D) 6.59 percent

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter12: The Cost Of Capital

Section: Chapter Questions

Problem 2P

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