To finance their new space age aircraft, Boeing plans to issue $2,500,000 worth of bond with...

  

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To finance their new space age aircraft, Boeing plans to issue $2,500,000 worth of bond with an annual coupon rate of 3.5%, maturing in 7 years. If the Flotation cost is expected to be 2.5% of the bond price and the company is in the 15% tax bracket, what is Boeing's after-tax cost of debt on the bond? (Enter your answer in percentage with two decimal point but do not enter the "%" symbol.) To finance their new space age aircraft, Boeing plans to issue $2,500,000 worth of bond with an annual coupon rate of 3.5%, maturing in 7 years. If the Flotation cost is expected to be 2.5% of the bond price and the company is in the 15% tax bracket, what is Boeing's after-tax cost of debt on the bond? (Enter your answer in percentage with two decimal point but do not enter the "%" symbol.)

Answer rating: 100% (QA)

To calculate Boeings aftertax cost of debt we need to consider the following steps 1 Calculate the f... View the full answer