Question
Temple-Midland, Inc. is issuing a $1,000 par value bond that pays 7.9 percent annual interest and matures in 15 years. Investors are willing to pay
Temple-Midland, Inc. is issuing a $1,000 par value bond that pays 7.9 percent annual interest and matures in 15 years. Investors are willing to pay $955 for the bond and Temple faces a tax rate of 18 percent. What is Temple's after-tax cost of debt on the bond?
The after-tax cost of debt is _______%. (Round to two decimal places.)
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Financial Markets and Institutions
Authors: Anthony Saunders, Marcia Cornett
6th edition
9780077641849, 77861663, 77641841, 978-0077861667
