In the Dell Farm issued a 30-year, 8 percent semiannual bond 7 years ago. The bond currently

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In the Dell Farm issued a 30-year, 8 percent semiannual bond 7 years ago. The bond currently sells for 108 percent of its face value. The company’s tax rate is 35 percent.

(a) What is the pretax cost of debt?

(b) What is the aftertax cost of debt?

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Essentials Of Corporate Finance

ISBN: 9780073405131

6th Edition

Authors: Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan

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Question Posted: Apr 24, 2012 07:33 AM

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In the Dell Farm issued a 30-year, 8 percent semiannual bond 7 years ago. The bond currently

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a The pretax cost of debt is the YTM of the companys bo...View the full answer

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