Question
Bond Yield and After-Tax Cost of Debt The Company's 8% coupon rate, semiannual payment, $1,000 par value bond that matures in 20-years sells at a
Bond Yield and After-Tax Cost of Debt
The Company's 8% coupon rate, semiannual payment, $1,000 par value bond that matures in 20-years sells at a price of $601.79. The company's federal-plus-state tax rate is 35%. 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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The Structured Credit Handbook
Authors: Arvind Rajan, Glen McDermott, Ratul Roy
1st Edition
0471747491, 978-0471747499
