Question
Suppose you are trying to estimate the after tax cost of debt for a firm as part of the calculation of the Weighted Average Cost
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Suppose you are trying to estimate the after tax cost of debt for a firm as part of the calculation of the Weighted Average Cost of Capital (WACC). The corporate tax rate for this firm is 34%. The firm's bonds pay interest semiannually with a 5.7% coupon rate and have a maturity of 10 years. If the the current price of the bonds is $1119.91, what is the after tax cost of debt for this firm? (Answer to the nearest tenth of a percent, e.g. 12.3%, but do not use a percent sign).
Suppose you are trying to estimate the after tax cost of debt for a firm as part of the calculation of the Weighted Average Cost of Capital (WACC). The corporate tax rate for this firm is 34%. The firm's bonds pay interest semiannually with a 5.7% coupon rate and have a maturity of 10 years. If the the current price of the bonds is $1119.91, what is the after tax cost of debt for this firm? (Answer to the nearest tenth of a percent, e.g. 12.3%, but do not use a percent sign).
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Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
11th Edition
0321357965, 978-0321357960
