Problem:
A company is contemplating a new investment to be financed 33 percent of debt.The firm could sell a new $1,000 par value bomd at net price of $920.The coupon interest is 9 percent and the bonds mature in 11 years.If the company is in a after tax bracket of 38 percent,
Required:
Question: What is the after tax cost of capital?
Note: Please provide equation and explain comprehensively and give step by step solution.