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Calculating Cost of Debt: Shanken Corp. issued a 30-year, 6.2 percent semi-annual bond 7 years ago. The bond currently sells for 108 percent of its
Calculating Cost of Debt: Shanken Corp. issued a 30-year, 6.2 percent semi-annual bond 7 years ago. The bond currently sells for 108 percent of its face value. The companys tax rate is 35 percent (a.) What is the pretax cost of debt? (b). What is the aftertax cost of debt? (c) Which is more relevant, the pre-tax or the after-tax cost of debt? Why?
Calculating Cost of Debt: Shanken Corp. issued a 30-year, 6.2 percent semi-annual bond 7 years ago. The bond currently sells for 108 percent of its face value. The companys tax rate is 35 percent
(a.) What is the pretax cost of debt?
(b). What is the aftertax cost of debt?
(c) Which is more relevant, the pre-tax or the after-tax cost of debt? Why?
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Corporate Finance With Connect Access Card
Authors: Stephen Ross ,Randolph Westerfield ,Jeffrey Jaffe
10th Edition
1259672484, 978-1259672484
