DOG, Inc. has a $20 million, 8.25%, 10-year-year bond issue selling at 97. The bond pays annual interest. What would be the before-tax component cost of debt for DOG?

Assuming they are in the 21% tax bracket and have unconstrained ability to take advantage of the tax benefits of debt, calculate their after-tax cost of debt.

Answer rating: 100% (QA)

To calculate the beforetax component cost of debt for DOG we can use the following formula Beforetax ... View the full answer