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(Computing the cost of debt) The Shiloh Corporation is contemplating a new investment that it plans to finance using one-third debt. The firm can sell
(Computing the cost of debt) The Shiloh Corporation is contemplating a new investment that it plans to finance using one-third debt. The firm can sell now $1,000 par value bonds with a 15-year maturity and a coupon interest rate of 12.4 percent (with interest paid semiannually) at a price of $950. If the compary is in a 34 percent tax bracket, what is the ater-tax cost of capital for the bonds? The after-tax cost of debt is Y. (Round to for decimal places.)
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