A companys 7 coupon rate semiannual payment 1000 par value


Bond Yield and After-Tax Cost of Debt

A company's 7% coupon rate, semiannual payment, $1,000 par value bond that matures in 20 years sells at a price of $589.43. The company's federal-plus-state tax rate is 30%. What is the firm's after-tax component cost of debt for purposes of calculating the WACC? (Hint: Base your answer on the nominal rate.) Round your answer to two decimal places.

_________%

Request for Solution File

Ask an Expert for Answer!!
Financial Management: A companys 7 coupon rate semiannual payment 1000 par value
Reference No:- TGS01256992

Expected delivery within 24 Hours