Question
The outstanding debentures of Power Limited are priced at R898 each. These debentures have a 10% coupon and pay interest annually. The debentures are non-redeemable
The outstanding debentures of Power Limited are priced at R898 each. These debentures have a 10% coupon and pay interest annually. The debentures are non-redeemable and have a par value of R1 000 each. The companys tax rate is 28%. What is Power Limiteds after-tax cost of debt?
A 7.2%
B 10%
C 11.14%
D 8.02%
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Foundations Of Financial Markets And Institutions
Authors: Franco Modigliani, Frank J. Jones, Michael G. Ferri, Frank J. Fabozzi
3rd Edition
0130180793, 978-0130180797
