Question
Laurel, Inc., has debt outstanding with a coupon rate of 5.9% and a yield to maturity of 7 . 2 % . Its tax rate
Laurel, Inc., has debt outstanding with a coupon rate of 5.9%and a yield to maturity of 7.2%.Its tax rate is 35%.What isLaurel's effective(after-tax) cost ofdebt?
NOTE: Assume that the debt has annual coupons.
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Contemporary Financial Management
Authors: R. Charles Moyer, James R. McGuigan, Ramesh P. Rao
14th edition
1337090581, 978-1337090582
