#10 Suppose that Coca-Cola is considering a new capital budgeting project. The project will use debt...
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#10 Suppose that Coca-Cola is considering a new capital budgeting project. The project will use debt with maturities of 15 years. To determine the cost of debt for the project, an analyst at Coca-Cola looks at currently trading Coca-Cola debt. The analyst is looking at a Coke bond that trades today for $933.00. This bond has an annual coupon rate of 8.00%, face value of $1,000, and will mature in 15 years. The marginal tax rate for Coca-Cola is 34.00%. What is the after-tax cost of debt for Coca-Cola? Submit Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924)) Hide Hint #10 Suppose that Coca-Cola is considering a new capital budgeting project. The project will use debt with maturities of 15 years. To determine the cost of debt for the project, an analyst at Coca-Cola looks at currently trading Coca-Cola debt. The analyst is looking at a Coke bond that trades today for $933.00. This bond has an annual coupon rate of 8.00%, face value of $1,000, and will mature in 15 years. The marginal tax rate for Coca-Cola is 34.00%. What is the after-tax cost of debt for Coca-Cola? Submit Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924)) Hide Hint
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ANSWER 576 CALCULATION The aftertax cost of debt for CocaCola is 576 EXPLANATION T... View the full answer
Related Book For
Fraud examination
ISBN: 978-0538470841
4th edition
Authors: Steve Albrecht, Chad Albrecht, Conan Albrecht, Mark zimbelma
Posted Date:
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