Cost of Debt Assignment | Homework For You
May 29th, 2020
(Cost of debt) Carraway Seed Company is issuing a $1,000 par value bond that pays 11 percent annual interest and matures in 13 years. Investors are willing to pay $985 for the bond. Flotation costs will be 12 percent of market value. The company is in a 25 percent tax bracket. What will be the firm’s after-tax cost of debt on the bond? The firm’s after-tax cost of debt on the bond will be %. (Round to two decimal places.) Get Finance homework help today
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