Question
A company has bonds outstanding with an average interest rate of 4%. If it issued a new bond now, the interest rate would be 7%.
A company has bonds outstanding with an average interest rate of 4%. If it issued a new bond now, the interest rate would be 7%. The corporate tax rate is 18%.
Part 1
What is the after-tax cost of debt?
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Guardians Of Finance
Authors: James R. Barth, Gerard Caprio, Ross Levine
1st Edition
0262526840, 978-0262526845
