Estimate for after-tax cost of debt


Bedrick has outstanding 10 year noncallable bonds with a face value of $1000. Current market price is $1495.56 & has a coupon rate of 10%. The tax rate for the company is 35%. The company wants to issue new debt, what would be an estimate for its after-tax cost of debt?

  1. 3.06%
  2. 2.30%
  3. 2.55%
  4. 2.93%

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Business Management: Estimate for after-tax cost of debt
Reference No:- TGS0105385

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