Consider the following information: Interest payments 2017: 2% 2018: 3% 2019: 4% Taxes paid 2017: 20%...
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Consider the following information: Interest payments 2017: 2% 2018: 3% 2019: 4% Taxes paid 2017: 20% 2018: 22% 2019: 18% Calculate the cost of debt. Use only full stop for decimals and do not input percentage sign. Hint: Use the historical interest payments to calculate the average debt yield and the historical taxes paid to calculate the tax shield. Remember that you have to use 1-average tax to get the tax shield. Consider the following information: Interest payments 2017: 2% 2018: 3% 2019: 4% Taxes paid 2017: 20% 2018: 22% 2019: 18% Calculate the cost of debt. Use only full stop for decimals and do not input percentage sign. Hint: Use the historical interest payments to calculate the average debt yield and the historical taxes paid to calculate the tax shield. Remember that you have to use 1-average tax to get the tax shield.
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To calculate the cost of debt you need to consider the average debt yield and the tax s... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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