What would be the after-tax cost of debt for a company with the yield to maturity...
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?
Homework Answers
After tax cost of debt = YTM(1 - Tax)
After tax cost of debt = 0.07(1 - 0.20)
After tax cost of debt = 0.056 or 5.6%
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What would be the after-tax cost of debt for a company with the
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