Question
Pink Zeppelin Corp.'s true cost of debt is 4% but it is able to borrow $60M for 5 years at a subsidized 3.2% rate. What
Pink Zeppelin Corp.'s true cost of debt is 4% but it is able to borrow $60M for 5 years at a subsidized 3.2% rate. What is the NPV of debt financing if the firm makes annual interest payments and has to repay the principal at maturity? The tax rate is 40%.
| $6.28M | ||
| $5.56M | ||
| $6.49M | ||
| $5.9M | ||
| $6.51M |
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Public Finance Theory And Practice
Authors: M. Marlow
1st Edition
0030969603, 978-0030969607
