My company is contemplating expanding by selling bonds. My investment banker advises me that the S1,000...
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My company is contemplating expanding by selling bonds. My investment banker advises me that the S1,000 par value bonds should sell at a premium of $1,100 less 3% for flotation fees. The bonds have a coupon rate of 10% and will mature in 10 years. What is my company's after tax cost of debt assuming we are subjected to a 15% Interest Subsidy Tax Rate (ISTR)? par value - Nd R(d = Nd + par value 2 R() = R(d) x (1-ISTR) My company is contemplating expanding by selling bonds. My investment banker advises me that the S1,000 par value bonds should sell at a premium of $1,100 less 3% for flotation fees. The bonds have a coupon rate of 10% and will mature in 10 years. What is my company's after tax cost of debt assuming we are subjected to a 15% Interest Subsidy Tax Rate (ISTR)? par value - Nd R(d = Nd + par value 2 R() = R(d) x (1-ISTR)
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Related Book For
International Financial Management
ISBN: 978-0078034657
6th Edition
Authors: Cheol S. Eun, Bruce G.Resnick
Posted Date:
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