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NRC Inc. has issued 20-year bonds that pay interest semi-annually at a 10% annual coupon rate. The flotation costs associated with the issuance of new
NRC Inc. has issued 20-year bonds that pay interest semi-annually at a 10% annual coupon rate. The flotation costs associated with the issuance of new equity is equal to 4.0% of the $1.000 face value. The firm is in the 30% corporate tax bracket. What is the after-tax cost of debt for bonds if the bonds are currently sold at $1.025 per share? Multiple Choice 712 percent 8.24 percent 9.72 percent 10.18 percent Multiple Choice ( O 7.12 percent O 8.24 percent O 9.72 percent 10.18 percent 6.80 percent
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