You check The Wall Street Journal and see that PCM bonds are selling for $889.50 per bond. These bonds have a 7.25 percent annual coupon rate, with semi-annual payments. The bonds mature in twenty years. PCM is in the 40 percent tax bracket. What is the estimate of the company's after-tax cost of debt?

Answer rating: 100% (QA)

To estimate the companys aftertax cost of debt we need to consider the taxdeductibility of interest ... View the full answer