Mojo Mining has a bond outstanding that sells for $2,165 and matures in 17 years. The bond pays semiannual coupons and has a coupon rate of 7.06 percent. The par value is $2,000. If the company's tax rate is 39 percent, what is the aftertax cost of debt?
Before tax cost of debt | = | =rate(nper,pmt,pv,fv)*2 | Where, | |||
= | 6.26% | nper | = | 34 | ||
pmt | = | $ 70.60 | ||||
pv | = | $ -2,165.00 | ||||
fv | = | $ 2,000.00 | ||||
After tax cost of debt | = | 6.26% | *(1-0.39) | |||
= | 3.82% |
Mojo Mining has a bond outstanding that sells for $2,165 and matures in 17 years. The...
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