Bond interest payments before and after taxes   Charter Corp. has issued 2,798 debentures with a total principal value of $2,798,000. The bonds have a coupon interest rate of 9​%.   a.  What dollar amount of interest per bond can an investor expect to receive each year from​ Charter? b.  What is​ Charter's total interest expense per year associated with this bond​ issue?   c.  Assuming that Charter is in a 34​% corporate tax​ bracket, what is the​ company's net​ after-tax interest cost associated with this bond​ issue?

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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Bond interest payments before and after taxes
 
Charter Corp. has issued 2,798 debentures with a total principal value of $2,798,000. The bonds have a coupon interest rate of 9​%.
 
a.  What dollar amount of interest per bond can an investor expect to receive each year from​ Charter?
b.  What is​ Charter's total interest expense per year associated with this bond​ issue?  
c.  Assuming that Charter is in a 34​% corporate tax​ bracket, what is the​ company's net​ after-tax interest cost associated with this bond​ issue?   
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