A company's 4% coupon rate, semiannual payment, $1,000 par value bond that matures in 20 years sells at a price of $485.23. The company's federal-plus-state
A company's 4% coupon rate, semiannual payment, $1,000 par value bond that matures in 20 years sells at a price of $485.23. The company's federal-plus-state tax rate is 25%. What is the firm's after-tax component cost of debt for purposes of calculating the WACC? (Hint: Base your answer on the nominal rate.) Round your answer to one decimal place.
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Authors: Peter S Kaufman, Henry F Owsley
2nd Edition
1587983044, 978-1587983047
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