Question
**Please Show Work** Tangshan Mining Corporation is considering issuing long-term debt. The debt would have a 30-year maturity and a 10 percent coupon rate. The
**Please Show Work**
Tangshan Mining Corporation is considering issuing long-term debt. The debt would have a 30-year maturity and a 10 percent coupon rate. The firm would have to pay flotation costs of 10 percent of $1000 face value. The bond is currently selling at face value. The firm's tax rate is 35 percent. Given this information, the after-tax cost of debt for Tangshan Mining Corporation would be
A.7.26%.
B.11.17%.
C.10.00%.
D.none of the above.
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College Physics
Authors: Jerry D. Wilson, Anthony J. Buffa, Bo Lou
7th edition
9780321571113, 321601831, 978-0321601834
