calculate the after tax cost of debt for these options (Use the approximation method). Subsidy Tax Rate
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Question:
calculate the after tax cost of debt for these options (Use the approximation method). Subsidy Tax Rate is 15% on these $1,000 face value bonds. My investment banker has also told me their flotation cost is $30 per bond.
My options are:
Coupon rate Time to maturity Selling at a Premium(+ = above face value) / Discount(- = below face value)
Bond A 9% 16 years +$250
Bond B 6% 7 years face value
Bond C 5% 10 years - $75
1.Calculate the after tax cost of long term debt for each of these three options
Related Book For
Intermediate Financial Management
ISBN: 978-1111530266
11th edition
Authors: Eugene F. Brigham, Phillip R. Daves
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