Question
Wildhorse Ltd. has issued bonds that never require the principal amount to be repaid to investors. Correspondingly, Wildhorse must make interest payments into the infinite
Wildhorse Ltd. has issued bonds that never require the principal amount to be repaid to investors. Correspondingly, Wildhorse must make interest payments into the infinite future. If the bondholders receive annual payments of $92 and the current price of the bonds is $800.00
What is the after-tax cost of this debt for Wildhorse if the firm is in the 40 percent marginal tax rate?
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Financial Reporting and Analysis
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
7th edition
1259722651, 978-1259722653
