Cost of debt-what is the after-tax cost of capital

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Reference no: EM131016009

(Cost of debt) The Walgreen Corporation is contemplating a new investment that it plans to finance using one-third debt. The firm can sell new $1,000 par value bods with a 15-year maturity at a price of $948 that carry a coupon interest rate of 12.6 percent that is paid semiannually. If the company is in a 34 percent tax bracket,what is the after-tax cost of capital to Walgreen for the bonds?

The after-tax cost of debt is___%. (Round to two decimal places.)

Reference no: EM131016009

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