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Husky Enterprises recently sold an issue of 13-year maturity bonds. The bonds were sold at a deep discount price of $375 each. After flotation costs,
Husky Enterprises recently sold an issue of 13-year maturity bonds. The bonds were sold at a deep discount price of $375 each. After flotation costs, Husky received $358.41 each. The bonds have a $1,000 maturity value and pay $35 interest at the end of each year. Compute the after-tax cost of debt for these bonds if Huskys marginal tax rate is 40 percent. Round your answer to two decimal places. 10.12% would be entered as 10.12
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