Question
Bond Yield and After-Tax Cost of Debt A company's 8% coupon rate, semiannual payment, $1,000 par value bond that matures in 30 years sells at
Bond Yield and After-Tax Cost of Debt A company's 8% coupon rate, semiannual payment, $1,000 par value bond that matures in 30 years sells at a price of $637.09. The company's federal-plus-state tax rate is 30%. What is the firm's after-tax component cost of debt for purposes of calculating the WACC? (Hint: Base your answer on the nominal rate.) Round your answer to two decimal places.
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Empirical Finance
Authors: Sardar M. N. Islam, Sethapong Watanapalachaikul
1st Edition
3790815519, 978-3790815511
