DuPont reports in a recent balance sheet $299 million of 6.50 percent bonds payable due in 2028.

Question:

DuPont reports in a recent $299 million of 6.50 percent bonds payable due in 2028. The company's effective income tax rate is approximately 27 percent.
a. Compute the company's after-tax cost of borrowing on this bond issue stated as a total dollar amount.
b. Compute the company's after-tax cost of borrowing on this bond issue stated as a percentage of the amount borrowed.
c. Describe briefly the advantage of raising funds by issuing bonds as opposed to stocks.
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...