The BondsRUs Company needs to estimate the cost of debt in their WACC calculation. The 15-year...
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The BondsRUs Company needs to estimate the cost of debt in their WACC calculation. The 15-year bond issue would have $1,000 par value, 5% coupon rate, and pay interest semiannually. The bonds would sell for $939.65 per bond. SHOW ALL WORK on the TI BAII Plus Calculator. a) (4 pts) What is the cost of debt? b) (2 pts) If the marginal tax rate of the company is 21%, what is the after-tax cost of debt to be used in the WACC calculation? The BondsRUs Company needs to estimate the cost of debt in their WACC calculation. The 15-year bond issue would have $1,000 par value, 5% coupon rate, and pay interest semiannually. The bonds would sell for $939.65 per bond. SHOW ALL WORK on the TI BAII Plus Calculator. a) (4 pts) What is the cost of debt? b) (2 pts) If the marginal tax rate of the company is 21%, what is the after-tax cost of debt to be used in the WACC calculation?
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Related Book For
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Posted Date:
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