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Question 5. 5. Wentworth Industries sold a 15 year $1,000 face value bond with a 10.5 percent coupon rate. Interest is paid annually. After flotation
Question 5.5. Wentworth Industries sold a 15 year $1,000 face value bond with a 10.5 percent coupon rate. Interest is paid annually. After flotation costs, Wentworth received $920 per bond. Compute the after-tax cost of debt for these bonds if the firm's marginal tax rate is 28 percent. (Points : 3.4) |
5.49% 7.62% 8.40% 11.65%
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