Determine appropriate after-tax cost of new debt for triplin
Course:- Financial Econometrics
Reference No.:- EM13329427

Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Financial Econometrics

Triplin Corporation's marginal tax rate is 35%. It can issue 10-year bonds with an annual coupon rate of 7% and a par value of $1,000. After $12 per bond flotation costs, new bonds will net the company $966 in proceeds. Determine the appropriate after-tax cost of new debt for Triplin to use in a capital budgeting analysis.

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Financial Econometrics) Materials
What is the present value at a 10% discount rate of the depreciation tax shield for a firm in the 35% tax bracket that purchases a $50,000 asset being depreciated straight-l
You have $5,000 to deposit. Regency Bank offers 15 percent per year compounded monthly (1.25 percent per month), while King Bank offers 15 percent but will only compound ann
Your company borrows $55,000 today to funds its growth initiatives. It must repay the bank in 4 annual payments of $17,100 at the end of each year. What annual interest rate
The Old machine originally cost $ 363 and was bought Three (3) years ago (i.e. it has depreciated for three years). It could be sold today for $ 78 or sold in two years for
Say that you are the CFO of an organization, what methods and strategies could you use to keep the cost of capital as low as possible. this is while simultaneously minimizin
ZR Corporation's stock has a beta coefficient equal to 1.8 and a required rate of return equal to 16 percent. If the expected return on the market is 10 percent, what is the
A small business owner visits his bank to ask for a loan. The owner states that she can repay a loan at $1,250 per month for the next 3 years and then $500 per month for two
A Firm with a 14% WACC is evaluating two projects for this year's capital budget. After tax cash flows, including depreciation are as follows; Project A; -6,000 , 2,000, 2,0