Question
The question is: What is the after tax cost of debt for Ford given its effective tax rate for 2018 was 15%? Coupon Rate of
The question is: What is the after tax cost of debt for Ford given its effective tax rate for 2018 was 15%?
Coupon Rate of 4.346%
Tax Rate of 15%
Loan Amount of $1,500,000
Amount * Coupon Rate = 1,500,000*.04346 = $65,190
$65,190*.15 = $9,778.50
$65,190.50 - $9,778.50 = $55,411.50
$55,411.50 / $1,500,000 = 3.6941% is the after tax cost of debt for Ford.
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Financial Management Principles and Application
Authors: Arthur J. Keown, J. William Petty, David F. Scott, Jr.
10th edition
536514119, 536514110, 978-0536514110
