Great Seneca Inc. sells $100 million worth of 20-year to maturity 13.12% annual coupon bonds.
Great Seneca Inc. sells $100 million worth of 20-year to maturity 13.12% annual coupon bonds. The net proceeds (proceeds after flotation costs) are $981 for each $1000 bond. The firm's marginal tax rate is 40%. What is the after-tax cost of capital for this debt financing?
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Great Seneca Inc. sells $100 million worth of 20-year to maturity 13.12% annual coupon bonds. The net proceeds (proceeds after flotation costs) are $981 for each $1000 bond. The firm's marginal tax rate is 40%. What is the after-tax cost of capital for this debt financing?
