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The Zephyr Corporation is contemplating a new investment to be financed 33 percent from debt. The firm could sell new $1,000 par value bonds at
The Zephyr Corporation is contemplating a new investment to be financed 33 percent from debt. The firm could sell new $1,000 par value bonds at a net price of ?$970. The coupon interest rate is 13 ?percent, and the bonds would mature in 11 years. If the company is in a 20 percent tax? bracket, what is the? after-tax cost of capital to Zephyr for? bonds?
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