A company has a 25 tax rate and is planning to issue bonds


1. A company has a 25% tax rate and is planning to issue bonds with a 9% yield to maturity. What is its after-tax cost of debt?

2. How much will $20,000 grow into in 5 years if you earn 10%? Assume quarterly compounding.

 

3. Assuming an interest rate of 3%, what would be the present value of $15 million to be received in 5 years?

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Financial Management: A company has a 25 tax rate and is planning to issue bonds
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