Question
(Cost of debt) Temple-Midland, Inc. is issuing a $1,000 par value bond that pays 7.1 percent annual interest and matures in 15 years. Investors are
(Cost of debt) Temple-Midland, Inc. is issuing a $1,000 par value bond that pays 7.1 percent annual interest and matures in 15 years. Investors are willing to pay $948 for the bond and Temple faces a tax rate of 29 percent. What is Temple's after-tax cost of debt on the bond?
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Financial Markets and Institutions
Authors: Jeff Madura
11th Edition
1133947875, 9781305143005, 1305143000, 978-1133947875
