Question
ABC has a debt issue outstanding with 6 years to maturity with a par value of $1,000 which is selling at 105.5% of par. The
ABC has a debt issue outstanding with 6 years to maturity with a par value of $1,000 which is selling at 105.5% of par. The issue makes semi-annual payments and has a coupon rate of 6% annually. If the tax rate is 30%, what is ABCs after tax cost of debt?
a. 2.8% b. 3% c. 4% d. 6%
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Cases In Financial Reporting
Authors: Ellen Engel, D. Eric Hirst, Mary Lea McAnally
7th Edition
1934319791, 9781934319796
