A corporation recently purchased some corporate bonds that have a before-tax yield of 6.75%. The company has a tax rate of 35%. What is the after-tax return on these bonds? a. 4.39% b. 5.06% c. 4.44% d. 6.41% e. 3.89%

A corporation recently purchased some corporate bonds that have a before-tax yield of 6.75%. The company has a tax rate of 35%. What is the after-tax return on these bonds? a. 4.39% b. 5.06% c. 4.44% d. 6.41% e. 3.89%

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter14: Long-term Liabilities: Bonds And Notes

Section: Chapter Questions

Problem 1PEB: Brower Co. is considering the following alternative financing plans: Income tax is estimated at 40%...

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Please see an attachment for details general accounting question

A corporation recently purchased some corporate bonds that
have a before-tax yield of 6.75%. The company has a tax rate
of 35%. What is the after-tax return on these bonds?
a. 4.39%
b. 5.06%
c. 4.44%
d. 6.41%
e. 3.89%

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