Cost of debt carraway seed company is issuing a 1000 par, Ask an Expert

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(Cost of debt) Carraway Seed Company is issuing a $1,000 par value bond that pays 9 percent annual interest and matures in 9 years. Investors are willing to pay $975 for the bond. Flotation costs will be 11 percent of market value. The company is in a 30 percent tax bracket. What will be the firm's after-tax cost of debt on the bond? The firm's after-tax cost of debt on the bond will be ___%

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Financial Management, Finance

Category:- Financial Management
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