Question
( Cost of debt )Belton Distribution Company is issuing a $1,000 par value bond that pays 7.2 percent annual interest and matures in 15 years
(Cost of debt)Belton Distribution Company is issuing a $1,000 par value bond that pays 7.2 percent annual interest and matures in 15 years that is paid semiannually. Investors are willing to pay $963 for the bond. The company is in the 18
percent marginal tax bracket. What is the firm's after-tax cost of debt on the bond?
The firm's after-tax cost of debt on the bond is____ ?
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Financial Management Theory And Practice
Authors: Eugene F. Brigham, Michael C. Ehrhardt
10th Edition
0030329922, 9780030329920
