Nico Trading Corporation is considering issuing long term debt The debt would have a 30 year maturity and a 10 percent coupon rate In order to sell the issue, the bonds must be underpriced at a discount of 5 percent of face value In addition, the firm would have to pay flotation costs of 5 percent ...

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Nico Trading Corporation is considering issuing long-term debt. The debt would have a 30 year maturity and

Question:

Nico Trading is considering issuing long-term debt. The debt would have a 30 year and a 10 percent rate. In order to sell the issue, the bonds must be underpriced at a discount of 5 percent of face value. In addition, the firm would have to pay flotation costs of 5 percent of face value. The firm's tax rate is 35 percent. Given this information, the after tax for Nico Trading would be _______.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Cost Of Debt
The cost of debt is the effective interest rate a company pays on its debts. It’s the cost of debt, such as bonds and loans, among others. The cost of debt often refers to before-tax cost of debt, which is the company's cost of debt before taking... Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...