A company issued $20 million in long term bonds at par value 3 years ago with a
Fantastic news! We've Found the answer you've been seeking!
Question:
A company issued $20 million in long term bonds at par value 3 years ago with a coupon rate of 10%. The company has decided to issue an additional $20 million in bonds and expects the new issue to be priced at par value with a coupon rate of 8%. There is no other outstanding debt. The applicable tax rate is 35%. What is the appropriate after-tax cost of debt in order to compute the WACC.
Related Book For
Corporate Finance A Practical Approach
ISBN: 9781118217290
2nd Edition
Authors: Michelle R Clayman, Martin S Fridson, George H Troughton, Matthew Scanlan
Posted Date: