a Rework Problem 9 12 as follows Assume an 8 percent coupon rate What effect does changing the coupon rate have on the firms after tax cost of capital b Why is there a change ...

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a. Rework Problem 9- 12 as follows: Assume an 8 percent coupon rate. What effect does changing

Question:

a. Rework Problem 9- 12 as follows: Assume an 8 percent rate. What effect does changing the rate have on the firm’s after- tax cost of capital?
b. Why is there a change?
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...