Question: Bath plc has in issue irredeemable bonds with a coupon rate of 4%, currently trading at 84% cum- interest. If the tax rate changes from

Bath plc has in issue irredeemable bonds with a coupon rate

Bath plc has in issue irredeemable bonds with a coupon rate of 4%, currently trading at 84% cum- interest. If the tax rate changes from 25% to 20% for the company, what will happen to the after-tax cost of these bonds? A B D E Increase to 5% Decrease to 4.25% Increase to 4% Decrease to 3.75% The after-tax cost will not change

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