Question
Calculate the after-tax cost of debt using following bond information. A ten year bond has a 5 percent coupon rate and a $1000 face value.
Calculate the after-tax cost of debt using following bond information. A ten year bond has a 5 percent coupon rate and a $1000 face value. If the market value of the bond is $788, assuming that the bond makes annual coupon payments and the tax rate is 35%.
| 9.31 % | ||
| 4.09 % | ||
| 5.32 % | ||
| 8.19 % | ||
| 2.87 % |
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Personal Finance Turning Money Into Wealth
Authors: Arthur J Keown
5th Edition
0136070620, 9780136070627
