LL Incorporated’s currently outstanding 7 percent coupon bonds have a yield to maturity of 11 percent. LL believes it could sell new bonds that would provide a similar yield to maturity. If its marginal tax rate is 33 percent, what is LL’s after-tax cost of debt? Express your answer in percentage (without the % sign) and round it to two decimal places

LL Incorporated’s currently outstanding 7 percent coupon bonds have a yield to maturity of 11 percent. LL believes it could sell new bonds that would provide a similar yield to maturity. If its marginal tax rate is 33 percent, what is LL’s after-tax cost of debt? Express your answer in percentage (without the % sign) and round it to two decimal places

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 2P

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