Question
Your firm has just issued a 10-year $1,000.00 par value, 10% annual coupon bond for a net price of $964.00. The tax rate is 30%.
Your firm has just issued a 10-year $1,000.00 par value, 10% annual coupon bond for a net price of $964.00. The tax
rate is 30%. What is the after-tax cost of debt financing? Use a financial calculator to determine your answer.
A) 10.00%
B) 9.45%
C) 7.41%
D) 11.10%
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Financial Management For Decision Making
Authors: Harold Jr. Bierman, Seymour Smidt
1st Edition
1587982129, 9781587982125
