Problemtriplin corporations marginal tax rate is 35 it can, Ask an Expert

Accounting

Problem:

Triplin Corporation's marginal tax rate is 35%. It can issue 10-year bonds with an annual coupon rate of 7% and a par value of $1,000. After $12 per bond flotation costs, new bonds will net the company $966 in proceeds.

Required:

Question: Determine the appropriate after-tax cost of new debt for Triplin to use in a capital budgeting analysis.

Note: Show all workings.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91171806

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