Micro Spinoffs, Inc., issued 20-year debt a year ago at par value, with a coupon rate of

Question:

Micro Spinoffs, Inc., issued 20-year debt a year ago at par value, with a coupon rate of 9% paid annually. Today, the debt is selling at $1,050. If the firm's tax bracket is 30%, what is its after-tax cost of debt?

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...

Fantastic news! We've Found the answer you've been seeking!