Question
A corporate bond has a face value of $1,000 and a coupon rate of 9%. The bond matures in 14 years and has a current
A corporate bond has a face value of $1,000 and a coupon rate of 9%. The bond matures in 14 years and has a current market price of $946. If the corporation sells more bonds it will incur flotation costs of $26 per bond. If the corporate tax rate is 35%, what is the after-tax cost of debt capital?
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Options Futures And Other Derivatives
Authors: John C. Hull
3rd Edition
0131864793, 9780306457555
