Question
A company's 7% coupon rate, semiannual payment, $1,000 par value bond that matures in 25 years sells at a price of $689.9. The company's federal-plus-state
A company's 7% coupon rate, semiannual payment, $1,000 par value bond that matures in 25 years sells at a price of $689.9. The company's federal-plus-state tax rate is 35%. 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 two decimal places.
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Entrepreneurial Finance Venture Capital Deal Structure And Valuation
Authors: Janet Kiholm Smith, Richard L. Smith
2nd Edition
1503603210, 978-1503603219
