Peytonrsquos colt farm issued a 30-year 98 percent, Ask an Expert

Finance

Peyton’s Colt Farm issued a 30-year, 9.8 percent semiannual bond 5 years ago. The bond currently sells for 87.0 percent of its face value. The company’s tax rate is 40 percent. What is cost of debt? What is pretax cost of debt? What is aftertax cost of debt? Which one is more relevant?

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Financial Management, Finance

Category:- Financial Management
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