Global Products plans to issue long - term bonds to raise funds to finance its growth. The
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Question:
Global Products plans to issue longterm bonds to raise funds to finance its growth. The company has existing bonds outstanding that are similar to the new bonds it expects to issue. The existing bonds, which have a face value equal to $ and a coupon rate of interest equal to percent semiannual payments mature in years. These bonds are currently selling for $ each. Global's marginal tax rate is percent.
What should be the coupon rate on the new bond issue? Round your answer to one decimal place.
What is Global's aftertax cost of debt? Round your answer to one decimal place.
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