Mojo Mining has a bond outstanding that sells for $2.111 and matures in 19 years. The bond pays semiann value is $2,000. If the company's tax rate is 24 percent, what is the aftertax cost of debt?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Mojo Mining has a bond outstanding that sells for $2111 and matures in 19 years. The bond pays semiannual coupons and has a coupon rate of 6.58 percent. The par
value is $2,000. If the company's tax rate is 24 percent, what is the aftertax cost of debt?
Multiple Choice
O
O
O
4.62%
4.90%
5.68%
4.27%
6.08%
Transcribed Image Text:Mojo Mining has a bond outstanding that sells for $2111 and matures in 19 years. The bond pays semiannual coupons and has a coupon rate of 6.58 percent. The par value is $2,000. If the company's tax rate is 24 percent, what is the aftertax cost of debt? Multiple Choice O O O 4.62% 4.90% 5.68% 4.27% 6.08%
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