Question
A company's 7% coupon rate, semiannual payment, $1,000 par value bond that matures in 20 years sells at a price of $648.31. The company's federal-plus-state
A company's 7% coupon rate, semiannual payment, $1,000 par value bond that matures in 20 years sells at a price of $648.31. The company's federal-plus-state tax rate is 30%. What is the firm's after-tax component cost of debt for purposes of calculating the WACC? Round your answer to two decimal places. (Hint: Base your answer on the nominal rate.)
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Financial Management Theory And Practice
Authors: Prasanna Chandra
7th Edition
0070656657, 978-0070656659
