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Bond interest payments before and after taxes Charter Corp. has issued 2.500 debentures with a total principal value of S2.500.003. The bonds have a coupon
Bond interest payments before and after taxes Charter Corp. has issued 2.500 debentures with a total principal value of S2.500.003. The bonds have a coupon interest rate of 7%.
a. What dollar amount of interest per bond can an investor expect to receive each year from Charter?
b. What is Charter's total interest expense per year associated with this bond issue?
c. Assuming that Charter is in a 35% corporate tax bracket, what is the company's net after tax interest cost associated with this bond issue?
a. The dollar amount of interest per bond an investor can expect to receive each year from Charter is $. (Round to the nearest dollar.)
b. Charter's total interest expense per year associated with this bond issue is $. (Round to the nearest dollar.)
c. Mourning that Charter is in a 35% corporate tax bracket, the company's net after-tax interest cost associated with this bond issue is $. (Round to the nearest dollar.)
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Principles Of Managerial Finance
Authors: Lawrence J. Gitman, Chad J. Zutter
13th Edition
9780132738729, 136119468, 132738724, 978-0136119463
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