Marysa Corp. issued a 30-year, 5.8 percent semiannual bond seven years ago. The bond currently sells for
Question:
Marysa Corp. issued a 30-year, 5.8 percent semiannual bond seven years ago. The bond currently sells for 97 percent of its face value. The company’s tax rate is 21 percent.
a. What is the pretax cost of debt?
b. What is the aftertax cost of debt?
c. Which is more relevant, the pretax or the aftertax cost of debt? Why?
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a The pretax cost of debt is the YTM of the companys bonds so ...View the full answer
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Related Book For 
Corporate Finance Core Principles And Applications
ISBN: 9781260571127
6th Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
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