Question
AdmiralThrawnInc. plans to issue a $1,000 par value, 10-yearnoncallablebonds with a 3% annual coupon. The company's current tax rate is 47%, but Congress is considering
AdmiralThrawnInc. plans to issue a $1,000 par value, 10-yearnoncallablebonds with a 3% annual coupon. The company's current tax rate is 47%, but Congress is considering a change in the corporate tax rate to 29%. By how much would the component cost of debt used to calculate the WACC change (in percent) if the new tax rate was adopted?
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Principles Of Corporate Finance
Authors: Lawrence J. Gitman, Sean M. Hennessey
2nd Canadian Edition
0321452933, 978-0321452931
