Question
ICU Window, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with seven years to maturity that is
ICU Window, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with seven years to maturity that is quoted at 108 percent of face value. The issue makes semiannual payments and has an embedded cost of 6.1 percent annually. What is ICUs pretax cost of debt? If the tax rate is 38 percent, what is the aftertax cost of debt?
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Principles Of Corporate Finance
Authors: Lawrence J. Gitman, Sean M. Hennessey
2nd Canadian Edition
0321452933, 978-0321452931
