Galvatron Metals has a bond outstanding with a coupon rate of 6.5 percent and semiannual payments. The bond currently sells for $1,905 and matures in15 years. The par value is $2,000 and the company's tax rate is 21 percent. What is the company's aftertax cost of debt?Multiple Choice3.89%3.51%5.54%3.27%4.46%

After-tax cost of debt refers to the cost that is being incurred over the borrowed amount by the…

Galvatron Metals has a bond outstanding with a coupon rate of 6.5 percent and semiannual payments. The bond currently sells for $1,905 and matures 15 years. The par value is $2,000 and the company's tax rate is 21 percent. What is the company's aftertax cost of debt? Multiple Choice О 3.89% О 3.51% о 5.54%

Galvatron Metals has a bond outstanding with a coupon rate of 6.5 percent and semiannual payments. The bond currently sells for $1,905 and matures 15 years. The par value is $2,000 and the company's tax rate is 21 percent. What is the company's aftertax cost of debt? Multiple Choice О 3.89% О 3.51% о 5.54%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter11: Determining The Cost Of Capital

Section: Chapter Questions

Problem 9P: Bond Yield and After-Tax Cost of Debt A companys 6% coupon rate, semiannual payment, 1,000 par value...

See similar textbooks

Similar questions

Bond Yield and After-Tax Cost of Debt A companys 6% coupon rate, semiannual payment, 1,000 par value bond that matures in 30 years sells at a price of 515.16. The companys federal-plus-state tax rate is 40%. What is the firms after-tax component cost of debt for purposes of calculating the WACC? (Hint: Base your answer on the nominal rate.)
Galvatron Metals has a bond outstanding with a coupon rate of 6.4 percent and semiannual payments. The bond currently sells for $950 and matures In 24 years. The par value is $1,000 and the company's tax rate is 21 percent. What is the company's aftertax cost of debt? Multiple Choice O O O 5.39% 4.34% 3.78% 3.41% 3.19%
Galvatron Metals has a bond outstanding with a coupon rate of 6.5 percent and semiannual payments. The bond currently sells for $951 and matures in 23 years. The par value is $1,000 and the company's tax rate is 25 percent. What is the company's aftertax cost of debt? Multiple Choice О 5.20% 5.50% 4.80% 3.23% 3.46%
Save & Exit Galvatron Metals has a bond outstanding with a coupon rate of 6.2 percent and semiannual payments. The bond currently sells for $948 and matures in 24 years. The par value is $1,000 and the company's tax rate is 35 percent. What is the company's aftertax cost of debt? Multiple Choice 4.31% 3.98% 3.10% 3.32% 4.57%
Galvatron Metals has a bond outstanding with a coupon rate of 6.7 percent and semiannual payments. The bond currently sells for $1,863 and matures in 21 years. The par value is $2,000 and the company's tax rate is 21 percent. What is the company's aftertax cost of debt? 4.67% 3.67% 3.43% 4.07% 5.80%
Mojo Mining has a bond outstanding that sells for $2,174 and matures in 18 years. The bond pays semiannual coupons and has a coupon rate of 7.14 percent. The par value is $2,000. If the company's tax rate is 21 percent, what is the aftertax cost of debt? Multiple Choice O O 6.07% 4.75% 534% 65th
Beckham Corporation has semiannual bonds outstanding with 15 years to maturity and the bonds are currently priced at $846.16. If the bonds have a coupon rate of 8.5 percent, then what is the after-tax cost of debt for Beckham if its marginal tax rate is 35%? 5.283% 6.868% 10.401% 7.655%
ojo Mining has a bond outstanding that sells for $2,084 and matures in 22 years. The bond pays semiannual coupons and has a coupon rate of 6.34 percent. The par value is $2,000. If the company's tax rate is 21 percent, what is the aftertax cost of debt? Please avoid answers in image thank you
Inventive Response has bonds outstanding that mature in 8.5 years, have a 4 percent coupon, and pay interest annually. These bonds have a face value of $1,000 and a current market price of $1,180.30. What is the company’s after-tax cost of debt if its tax rate is 21 percent? 1.35 percent 1.70 percent 2.15 percent 2.65 percent 3.40 percent
Hydro Systems has bonds outstanding with a face value of $1,000, 13 years to maturity, and a coupon rate of 6.5 percent, paid semi-annually. What is the company's pretax cost of debt if the bonds currently sell for $1,056? Group of answer choices 5.88 percent 6.42 percent 5.55 percent 5.36 percent 4.71 percent
Years ago, Bustle Company sold a $1,000 par value bond that now has 25 years to maturity and an 8.00% annual coupon that is paid quarterly. The bond currently sells for $1,005, and the company's tax rate is 40%. What is the component cost of debt for use in the WACC calculation? MUST SHOW WORK O 5.04% O 5.02% 5.59% 6.29%
Inventive Response has bonds outstanding that mature in 8.5 years, have a 4 percent coupon, and pay interest annually. These bonds have a face value of $1,000 and a current market price of $1,180.30. What is the company’s after-tax cost of debt if its tax rate is 21 percent? 1.35 percent 1.70 percent 2.15 percent 2.65 percent 3.40 percent Therapeutic Solutions Inc. just paid an annual dividend of $1.45 per share last year. The market price of the stock is $26.30 and the growth rate is 5 percent. What is the firm’s cost of equity? 10.51 percent 10.79 percent 11.06 percent 11.44 percent 11.85 percent