Micro spinoffs inc issued 20-year debt a year ago at par, Ask an Expert

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Micro Spinoffs Inc. issued 20-year debt a year ago at par value with a coupon rate of 6%, paid annually. Today, the debt is selling at $1,130. If the firm’s tax bracket is 30%, what is its percentage after-tax cost of debt? Assume a face value of $1,000. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

After-tax cost of debt ________%

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Financial Management, Finance

Category:- Financial Management
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