Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Company B has $50 million of bonds outstanding (face value). These are 10-year bonds, and they are currently selling at 98% of par. The annual coupon rate on the bond issue is 4%. What would be Company B’s before-tax component cost of debt? If company B has a tax-rate of 25%, what is their after-tax cost of debt?
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