You are analyzing the after tax cost of debt for a firm You know that the firms 12 year maturity, 9 5 percent semi annual coupon bonds are selling at a price of $1,200 If these bonds are the only debt outstanding for the firm, what is the after tax cost of debt for this firm if it has a marginal ta...

The current YTM for the bonds can be calculated as follows Solving we f ...

You are analyzing the after-tax cost of debt for a firm. You know that the firms 12-year

Question:

You are analyzing the after-tax for a firm. You know that the firm’s 12-year maturity, 9.5 percent semi-annual bonds are selling at a price of $1,200. If these bonds are the only debt outstanding for the firm, what is the after-tax for this firm if it has a marginal tax rate of 34 percent? What if the bonds are selling at par?

Cost Of Debt
The cost of debt is the effective interest rate a company pays on its debts. It’s the cost of debt, such as bonds and loans, among others. The cost of debt often refers to before-tax cost of debt, which is the company's cost of debt before taking... Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...