If a corporation has an average tax rate of 40 percent, the approximate annual, after-tax cost of debt for a 10-year, 8 percent coupon, 3% floatation costs, $1,000 par value semiannual bond selling at $1,150 is ________. A) 3.18 percent B) 6.36 percent C) 3.82 percent D) 6.59 percent
If a corporation has an average tax rate of 40 percent, the approximate annual, after-tax cost of debt for a 10-year, 8 percent coupon, 3% floatation costs, $1,000 par value semiannual bond selling at $1,150 is ________. A) 3.18 percent B) 6.36 percent C) 3.82 percent D) 6.59 percent
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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5) If a corporation has an average tax rate of 40 percent, the approximate annual, after-tax cost of debt for a 10-year, 8 percent coupon, 3% floatation costs, $1,000 par value semiannual bond selling at $1,150 is ________.
A) 3.18 percent
B) 6.36 percent
C) 3.82 percent
D) 6.59 percent
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