A firm sells a 30 year maturity bond with 5% cuopon interest at a par calue of

Fantastic news! We've Found the answer you've been seeking!

Question:

A firm sells a 30 year maturity bond with 5% cuopon interest at a par calue of $1,000. The firm's tax rate is 40%. What is the after tax cost of this debt? Answer in percent.

Related Book For answer-question

Financial management theory and practice

ISBN: 978-0324422696

12th Edition

Authors: Eugene F. Brigham and Michael C. Ehrhardt

See More Books

Posted Date: Apr 07, 2024 02:55 PM

See More Questions

Beginning Capital Balance- 25600 Net Income or Loss for the period- 20300 Additional Investments or Withdrawals by the owner(s)- 4500 Drawing made by the owner(s) during the period.- CALCULATE
John Whiteck, financial vice president of Fox River Telephone Company, has just begun reviewing the minutes of the companys November 2016 board of directors meeting. The major topic discussed at the...
Assume that you were recently hired as assistant to Jerry Lehman, financial VP of Coleman Technologies. Your first task is to estimate Colemans cost of capital. Lehman has provided you with the...
The graph of f(x) = ax 2 + bx + c is shown in the figure. Solve each inequality. (a) f(x) < 0 (b) f(x) = 0 I 3 -y=f(x)
Consider aluminum circumferential fins with r1 = 1.0 cm, r2 = 2.0 cm, and thicknesses of 1.0, 2.0, and 3.0 mm. The convection coefficient is 160 W/m2 C. Compare the heat transfers for six 1.0-mm...
Consider the decision about how fast to sail an ocean cargo ship. As the ships speed increases, fuel consumption increases. For example, a 70,000-ton cargo ship burns 16.5 tons of fuel per!day at 11...
Two of your friends just completed a First Screen analysis for an e-commerce site that they hope to launch to sell horse-riding supplies such as saddles, lead ropes, and feed buckets. They are...
(Adjusting Entries) A review of the ledger of Oklahoma Company at December 31, 2005, produces the following data pertaining to the preparation of annual adjusting entries. 1. Salaries Payable $0....
1 Define Management? Explain its features, importance and nature? 2 Briefly explain about functions of management 3 Define leadership and explain leadership styles? 4 Briefly explain about decision...
Technology has advanced how organizations raise money or seek debt to finance their operations. Today, social media and the Internet have influenced these processes. For this discussion, provide an...
A train engine is pulling four boxcars, each of inertia $m$. The engine can exert a force of magnitude $F$ on what it is pulling. Assuming that friction can be ignored, what is the tension in...
A $60-\mathrm{kg}$ student is in an elevator moving downward with constant velocity. He uses a bathroom scale to measure the upward force exerted on his feet. What force magnitude does the scale...
A low-friction track is set up with a spring on the right end. In the middle of the track, a $2.0-\mathrm{kg}$ cart moving to the right at $5.0 \mathrm{~m} / \mathrm{s}$ overtakes a...
You release a block from the top of a long, slippery inclined plane of length $\ell$ that makes an angle $\theta$ with the horizontal. The magnitude of the block's acceleration is \(g \sin...
A railroad car that has an inertia of $5.04 \times 10^{4} \mathrm{~kg}$ is moving to the right at $4.25 \mathrm{~m} / \mathrm{s}$ when it collides and couples with three identical railroad cars...
A 15 KV, 1500 rpm cylindrical rotor synchronous generator is synchronized to a 13.5 kV (line for line) grid and the excitation voltage is set to 13.8 kV (line to line) Under this condition the...
Shreemaya Hotel in !adore was facing a problem of low demand for its rooms due to off season. The Managing Director (MD) of the hotel, Mrs. Sakina was very worried. She called upon the Marketing...
The median is less than 8 . An analysis of the data reveals that there are 10 minus signs and 8 plus signs. Use the sign test to test the given alternative hypothesis at the $\alpha=0.05$ level of...
According to Colliers International, the median monthly parking rate in the United States for 2012 was $\$ 164.80$. The data in Table 7 represent a random sample of monthly parking rates in...
Ten women participate in a study. A physical therapist measures the women's waistlines before and 8 weeks after a rigorous exercise program begins. Test whether the program decreased the median...

A firm sells a 30 year maturity bond with 5% cuopon interest at a par calue of

Question:

Expert Answer:

Heres how to calculate the aftertax cost of debt for this bond 1 Calculate th... View the full answer

Financial management theory and practice

Students also viewed these finance questions