Multiple Choice
A firm can issue $1,000 par value bond that pays $100 per year in interest at a price of $980.The bond will have a 5-year life.The firm is in a 35% tax bracket.What is the after tax cost of debt?
A) 10.53%
B) 10.20%
C) 6.85%
D) 6.50%
Correct Answer:
Verified
Correct Answer:
Verified
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