What is the after tax cost of debt

Assignment Help Business Management
Reference no: EM131376093

Suppose a company will issue new 20-year debt with a par value of $1,000 and a coupon rate of 9 percent, paid annually. The tax rate is 40 percent. If the flotation cost is 2 percent of the issue proceeds, what is the after-tax cost of debt?

Reference no: EM131376093

Questions Cloud

Profit-maximizing level of output : What is the monopolist's profit at the profit-maximizing level of output?
What you learned from completing your own floor plan : Write a summary of your project that includes the following information:If this is a new facility or a renovation,Reason you selected the facility,Who are your stakeholders for this project,What are your planning needs,What are your planning goals.
Discuss about the post given below : The facility intends to handle the needs of the staff, stakeholders and the community at large at different levels. This is due to the fact that their needs are different. The needs of the above groups will be assessed using the following procedur..
Share your thoughts and feelings about the emerging china : Share your thoughts and feelings about the new, emerging China. In what ways will China's culture. Politics, economy, and size impact your family? What about your country? 200 words.
What is the after tax cost of debt : Suppose a company will issue new 20-year debt with a par value of $1,000 and a coupon rate of 9 percent, paid annually. The tax rate is 40 percent. If the flotation cost is 2 percent of the issue proceeds, what is the after-tax cost of debt?
Prepare a research study on single parenthood : Prepare a research study on Single Parenthood
Calculate the cost of each capital component : Calculate the cost of each capital component (that is, the after-tax cost of debt), the cost of preferred stock (including flotation costs), and the cost of equity with the DCF method and the CAPM method.
What is the purpose of the orifice : What is the purpose of the orifice? Why is it not a good idea to drill out orifices in the field?
What will the phosphorus concentration of the river : If no treatment facility is provided, what will the phosphorus concentration of the river be downstream of the sewage discharge? Does this value meet the EA's quality requirements

Reviews

Write a Review

 

Business Management Questions & Answers

  Review the components contained

Review the components contained

  Discuss the heuristics and biases

Assume your company is hiring a new marketing manager. You and one of other senior managers has been interviewing applicants. An applicant just finished the interview procedure and has the following skills, background and characteristics:

  Explain how does the answer change if a discount given

Suppose Sandra's fears about increasing out- sourcing costs come to fruition and the cost rises to $22/unit for subcontracting. Does this change the decision when the discount is $5?

  The a7d affair

Read Case 1.3: The A7D Affair, located here or on page 37 in your textbook. In the case study, Vandivier found his professional code of conduct, moral standards, and legal standards came into conflict with one another.

  Analyze major components of agencys hr systems goals

Analyze at least three of the major components of the agency's human resource system's goals and practices regarding the recruitment and hiring of a qualified workforce.

  Understanding and identification of relevant issues of case

Advise Mary whether there are any terms of the parking contract that have been breached by Queens Parking Ltd under the common law of contract and/or statute.

  Regional economic outlook report

Visit the International Monetary Fund (IMF) website and examine the Regional Economic Outlook report. This report is identified in your required readings for this week. Select a country included within the Middle East and Central Asia report.

  Is sdi close to achieving a breakeven volume of sales

Is SDI close to achieving a breakeven volume of sales? What is SDI's present strategy? Is the strategy working? Are fundamental changes needed?

  How to close the sale effectively

how to close the sale effectively. Chris asks her a number of questions to help sort out the difficulties. Which of the following questions would Chris be LEAST likely to ask.

  Generation language programming language

Describe how a third generation language programming language is used in conjunction with SQL to develop database applications.

  A corporation life cycle be extended

What is reengineering? What are the seven principles for reengineering proposed by Michael Hammer? Explain which principle is most important in your opinion.

  Interactionist perspective media analysis

Symbolic Interactionist Perspective Media Analysisa television program that you know contains a social inequality or social class theme (e.g. racism, sexism, social class categories).

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd