Question: If a company has a tax rate of 30 percent
If a company has a tax rate of 30 percent and interest expense was $10,000, what is the after-tax cost of the debt?
Answer to relevant QuestionsWhich type of financing, debt or equity, increases the risk factor of a business? Why?Martin Company has a line of credit with Federal Bank. Martin can borrow up to $600,000 at any time over the course of the 2013 calendar year. The following table shows the prime rate expressed as an annual percentage along ...For each of the following situations, calculate the amount of bond discount or premium, if any:a. Wolfe Co. issued $120,000 of 6 percent bonds at 101. b. Riley, Inc., issued $80,000 of 10-year, 8 percent bonds at 98. c. ...On January 1, 2013, Seaside Enterprises issued bonds with a face value of $60,000, a stated rate of interest of 8 percent, and a five-year term to maturity. Interest is payable in cash on December 31 of each year. The ...During 2013 and 2014, Cook Co. completed the following transactions relating to its bond issue. The company’s fiscal year ends on December 31. 2013 Mar. 1 Issued $200,000 of eight-year, 6 percent bonds for $194,000. The ...
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