After Tax Cost of the Capital Assignment | Homework For You
June 9th, 2020
10. Lucy Inc. has a bond with a $1,000 face value, and a coupon rate of 10%. A new issue would have a flotation cost of 5% of the $1,125 market value. The bond will mature in 40 years. Lucy’s marginal tax rate is 34%. What is the approximate after tax cost of this capital?
d) 9.1%. Get Finance homework help today