Question
Acme corp issued a 15-year 6 percent semi annual bond 2 years ago. The bond currently sells for 95 percent of its face value. The
Acme corp issued a 15-year 6 percent semi annual bond 2 years ago. The bond currently sells for 95 percent of its face value. The companys tax rate is 35 percent.
What is the pretax Cost of Debt
What is the after cost of debt
Which is more relevant the pretax or the aftertax cost of debt?
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Finance Applications and Theory
Authors: Marcia Cornett
4th edition
1259691411, 978-1259691416
