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Question 7 Bath plc has in issue irredeemable bonds with a coupon rate of 4%, currently trading at 84% cuminterest. If the tax rate changes

Question 7 Bath plc has in issue irredeemable bonds with a coupon rate of 4%, currently trading at 84% cuminterest. If the tax rate changes from 25% to 20% for the company, what will happen to the after-tax cost of these bonds? A Increase to 5% B Decrease to 4.25% C Increase to 4% D Decrease to 3.75% E The after-tax cost will not change

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