Micro Spinoffs, Inc., issued 20-year debt a year ago at par value with a coupon rate of 8%, paid annually. Today, the debt is selling at $1,100. If the firm's tax bracket is 20%, what is its after-tax cost of debt? (Do not round intermediate calculations. Round your answer to 2 decimal places.) After-tax cost of debt
Micro Spinoffs, Inc., issued 20-year debt a year ago at par value with a coupon rate of 8%, paid annually. Today, the debt is selling at $1,100. If the firm's tax bracket is 20%, what is its after-tax cost of debt? (Do not round intermediate calculations. Round your answer to 2 decimal places.) After-tax cost of debt
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter11: Determining The Cost Of Capital
Section: Chapter Questions
Problem 14P
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![Micro Spinoffs, Inc., issued 20-year debt a year ago at par value with a coupon rate of
8%, paid annually. Today, the debt is selling at $1,100. If the firm's tax bracket is 20%,
what is its after-tax cost of debt? (Do not round intermediate calculations. Round your
answer to 2 decimal places.)
After-tax cost of
debt](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa3f86440-c463-4c9d-9297-c21c197940b5%2Fe6bd634e-b958-4ced-9809-888b99514e69%2Fp39stdr_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Micro Spinoffs, Inc., issued 20-year debt a year ago at par value with a coupon rate of
8%, paid annually. Today, the debt is selling at $1,100. If the firm's tax bracket is 20%,
what is its after-tax cost of debt? (Do not round intermediate calculations. Round your
answer to 2 decimal places.)
After-tax cost of
debt
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