The approximate after-tax cost of debt for a 20-year, 7 percent, $1,000 par value bond selling at
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Question:
The approximate after-tax cost of debt for a 20-year, 7 percent, $1,000 par value bond selling at $960 (assume a marginal tax rate of 40 percent) is
Select one:
a. 4.41 percent.
b. 5.15 percent.
c. 7 percent.
d. 7.35 percent.
Expert Answer:
The formula for calculating the cost of debt of a bond is C F P N F P 2 Where C Annu... View the full answer
Related Book For 
Financial Markets and Institutions
ISBN: 978-0077861667
6th edition
Authors: Anthony Saunders , Marcia Cornett
Posted Date:
