Question
Buchanan Corp. is refunding $15 million worth of 11% debt. The new bonds will be issued for 9%. The corporation's tax rate is 38%. The
Buchanan Corp. is refunding $15 million worth of 11% debt. The new bonds will be issued for 9%. The corporation's tax rate is 38%. The call premium is 8%. What is the net cost of the call premium after taxes?
Multiple Choice:
$759,000
$779,000
$744,000
$748,500
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Public Finance In A Changing World
Authors: Peter Birch Sorensen
1998th Edition
0333682211, 978-0333682210
