Question
Question 2(1 point) Great Seneca Inc.sells $100 million worth of 23-year to maturity 14.94% annual coupon bonds. The net proceeds (proceeds after flotation costs) are
Question 2(1 point)
Great Seneca Inc.sells $100 million worth of 23-year to maturity 14.94% annual coupon bonds. The net proceeds (proceeds after flotation costs) are $977 for each $1,000 bond. The firm's marginal tax rate is 40%. What is the after-tax cost of capital for this debt financing?
Round the answer to two decimal places in percentage form.(Write the percentage sign in the "units" box)
You should use Excel or financial calculator.
Your Answer:
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Modern Portfolio Theory and Investment Analysis
Authors: Edwin Elton, Martin Gruber, Stephen Brown, William Goetzmann
9th edition
9781118805800, 1118469941, 1118805801, 978-1118469941
