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Q. Macon farm's 6% coupon rate (semi-annual payment) $1,000 par value 12 year bonds currently sell at a price of $814.20. If its marginal tax rate is 40%, what is Macon's after-tax cost of debt?

1) Macon farm's 6% coupon rate (semi-annual payment) $1,000 par value 12 year bonds currently sell at a price of $814.20. If its marginal tax rate is 40%, what is Macon's after-tax cost of debt?

2) MMM expects to generate $60,000 in earnings that will be retained for reinvestment in the firm this year. If MMM's capital structure consists of 25% debt and 75% equity, stated in total funds, what is the WACC break point that is associated with retained earnings?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9155975

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