Question
Sams, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 12 years to maturity that is quoted
Sams, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 12 years to maturity that is quoted at 103 percent of face value. The issue makes semiannual payments and has an embedded cost of 4 percent annually.
- What is the companys pretax cost of debt?
- If the tax rate is 21 percent, what is after-tax cost of debt?
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Personal Finance
Authors: Thomas Garman, Raymond Forgue
12th edition
9781305176409, 1133595839, 1305176405, 978-1133595830
