Belton is issuing a $ 1,000 par value bond that pays 7 percent annual interest and matures

Question:

Belton is issuing a $ 1,000 bond that pays 7 percent annual interest and matures in 15 years. Investors are willing to pay $ 958 for the bond. Flotation costs will be 11 percent of market value. The company is in an 18 percent tax bracket. What will be the firm’s after- tax on the bond?
Cost Of Debt
The cost of debt is the effective interest rate a company pays on its debts. It’s the cost of debt, such as bonds and loans, among others. The cost of debt often refers to before-tax cost of debt, which is the company's cost of debt before taking... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...