What is after-tax cost of debt

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Micro Spinoffs, Inc., issued 20-year debt a year ago at par value with a coupon rate of 5%, paid annually. Today, the debt is selling at $1,050. If the firm’s tax bracket is 40%, what is its after-tax cost of debt? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

After-tax cost of debt %

Reference no: EM13949988

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What is after-tax cost of debt : Micro Spinoffs, Inc., issued 20-year debt a year ago at par value with a coupon rate of 5%, paid annually. Today, the debt is selling at $1,050. If the firm’s tax bracket is 40%, what is its after-tax cost of debt?

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