Computing the after-tax cost of debt

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Suppose a zero-coupon is selling at $614.00 today. It promises to pay $1,000 in exactly 10 years with annual compounding. What is the firms after-tax cost of debt if this is the sole debt outstanding ( assuming the firm is in the 20% tax bracket)?

Reference no: EM131044253

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Computing the after-tax cost of debt : Suppose a zero-coupon is selling at $614.00 today. It promises to pay $1,000 in exactly 10 years with annual compounding. What is the firms after-tax cost of debt if this is the sole debt outstanding ( assuming the firm is in the 20% tax bracket..
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