Problema company issued 20-year debt a year ago at par, Ask an Expert

Accounting

Problem:

A company issued 20-year debt a year ago at par value carrying a coupon rate of 8 percent (with INT payable annually). Today, the debt is selling at $1,050.

Required:

Question: If the firm's tax bracket is 35 percent, what is the after-tax cost of debt for the company?

Note: Be sure to show how you arrived at your answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91170376

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