User Account

All Pages

What is the after-tax cost of debt capital

Assignment Help Finance Basics
Reference no: EM131732942

A corporate bond has a face value of $1,000 and a coupon rate of 5%. The bond matures in 15 years and has a current market price of $925. If the corporation sells more bonds it will incur flotation costs of $25 per bond. If the corporate tax rate is 35%, what is the after-tax cost of debt capital?

a. 3.74%

b. 5.29%

c. 4.45%

d. 6.78%

Reference no: EM131732942

Questions Cloud

What is the expected return on the portfolio : Stock N, and a risk-free security that has a portfolio beta equal to the overall market. What is the expected return on the portfolio?
Discuss about the visualization of large-scale data sets : The two GCU scholarly database that will help one find the best research articles are CINAHL Complete database and ProQuest Health and Medical Complete.
Evaluate the performance of your organization or department : Evaluate the performance of your organization or department. Identify an area that would significantly benefit from initiating a change.
Show how rebecca can maintain current cash flow : Homemade Leverage. Lydic Enterprises is considering a change from its current capital structure. The company currently has an all-equity capital structure.
What is the after-tax cost of debt capital : If the corporate tax rate is 35%, what is the after-tax cost of debt capital?
Identified by enviro are helping them achieve mission : Whether the measures identified by Enviro are helping them achieve their mission.
Prepare general journal entries to the given statements : Summarize the manufacturing costs charged to job no. 321. (Use one compound entry.) Prepare general journal entries to the above statements
Brain-derived neurotrophic factor-deficient mice : Brain-derived neurotrophic factor-deficient mice develop aggressiveness and hyperphagia in conjunction with brain serotonergic abnormalities
Calculate the value of a bond that matures : Calculate the value of a bond that matures in 10 years and has a $1,000 par value. The annual coupon interest rate is 9 percent and the market

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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