Question
Belton Distribution Company is issuing a $1,000 par value bond that pays 7.0 percent annual interest and matures in 15 years that is paid semiannually.
Belton Distribution Company is issuing a $1,000
par value bond that pays 7.0percent annual interest and matures in 15
years that is paid semiannually. Investors are willing to pay $958
for the bond. The company is in the 18
percent marginal tax bracket. What is thefirm's after-tax cost of debt on thebond?
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
