After-tax cost of debt.
Given the following:
Yield to maturity (Before tax cost of debt) = 12%
Tax Rate = 40%
Please calculate the after-tax cost of debt.
after-tax cost of debt=Yield to maturity*(1-tax rate)
=12*(1-0.4)
which is equal to
=7.2%
After-tax cost of debt. Given the following: Yield to maturity (Before tax cost of debt) =...
David Abbot is interested in purchasing a bond Before-tax cost of debt and after-tax cost of debt Personal Finance Problem issued by Sony. He has obtained the following information on the security: Sony Bond Par value $1000 Coupon interest rate 6.5% Cost $930Years to maturity 10 Corporate tax rate 20% Answer the following questions: a. Calculate the before-tax cost of the Sony bond using the bond's yield to maturity (YTM) b. Calculate the after-tax cost of the Sony bond given...
Calculate the yield to maturity of a bond that has an after-tax cost of debt of 10%, assuming the tax rate is 21%.
a. The after-tax cost of debt using the bond's yield to maturity (YTM) is The after-tax cost of debt using the approximation formula is b. The cost of preferred stock is c. The cost of retained earnings is The cost of new common stock is d. Using the cost of retained earnings, the firm's WACC is Using the cost of new common stock, the firm's WACC is X P9-17 (similar to) Question Help Calculation of individual costs and WACC Dillon...
What would be the after-tax cost of debt for a company with the yield to maturity of 7% for its new bonds, if the applicable interest subsidy tax rate 20 percent?
To calculate the after-tax cost of debt, multiply the before-tax cost of debt by Western Gas & Electric Company (WGC) can borrow funds at an interest rate of 11.10% for a period of four years. Its marginal federal-plus-state tax rate is 40%. WGC's after-tax cost of debt is (rounded to two decimal places). At the present time, Western Gas & Electric Company (WGC) has 20-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a...
After-Tax Cost of Debt LL Incorporated's currently outstanding 8% coupon bonds have a yield to maturity of 13%. LL believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 35%, what is LL's after-tax cost of debt? Round your answer to two decimal places.?
The after-tax cost of debt is found by: O A. multiplying the before-tax cost of debt by (1-the corporate tax rate). O B. subtracting (1 -the corporate tax rate) from the before -tax cost of debt. O C. subtracting the corporate tax rate from the before tax cost of debt. D. dividing the before-tax cost of debt by (1 -the corporate tax rate).
PROBLEMS 11. (After-tax COST O CARTAL 210 After-tax cost of debt Calculate the after-tax c ode under each of the following con A tax rate of 37, and a yield to maturity of 754 b. A tax rate 125, and a pre-tax cost of debt of 102 A tax rate of O, and a yield to maturity of 79 After-tax cost of debt) Melbourne, Inc. currently has 3 bonds with a to maturity of in the 35% marginal tax rate,...
mouton limited inc faced an after tax cost of dent of 8.4 and a yield to maturity of 10.0%.What is its marginal tax rate? (Cost of debt) Mouton Limited, Inc faced an after-tax cost of debt of 8.4 and a yield to maturity of 10.0%. What is its marginal tax rater nited, Inc faced an after-tax cost of debt of 3.4 and a yield to maturity of IS its marginal tax rate? (Cost of com
To calculate the after-tax cost of debt, multiply the before-tax cost of debt by (1-T) Western Gas & Electric Company (WGC) can borrow funds at an interest rate of 9.70% for a period of five years. Its marginal federal-plus-state tax rate is 25%. WGC's after-tax cost of debt is (rounded to two decimal places). At the present time, Western Gas & Electric Company (WGC) has 15-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have...