About the after-tax cost of debt

Assignment Help Financial Management

Reference no: EM13885450

Handy Dandy Inc is preparing to calculate its cost of debt. It presently has debt outstanding that pays $ 81 per year in interest and has seven years left unto maturity. The current market value of those bonds is $ 1,090. The company pays 35% in taxes. What is the after-tax cost of debt?

Reference no: EM13885450

Questions Cloud

Set up private cemetery business : The Yurdone Corporation wants to set up a private cemetery business. According to the CFO, Barry M. Deep, business is "looking up." As a result, the cemetery project will provide a net cash inflow of $87,900 for the firm during the first year, and th..

Account that pays nominal interest rate : Suppose that on January 1 you deposit $100 in an account that pays a nominal (or quoted) interest rate of 11.33463%, with interest added (compounded) daily. How much will you have in your account on October 1, or 9 months later?

What is the amount of the operating cash flow : Hot and Cold has annual sales of $982,000, annual depreciation of $127,000, and net working capital of $243,000. The tax rate is 34 percent and the profit margin is 6 percent. The firm has no interest expense. What is the amount of the operating cash..

What distinguishes a hedge fund from other types of funds : What distinguishes a hedge fund from other types of funds?

About the after-tax cost of debt : Handy Dandy Inc is preparing to calculate its cost of debt. It presently has debt outstanding that pays $ 81 per year in interest and has seven years left unto maturity. The current market value of those bonds is $ 1,090. The company pays 35% in taxe..

BEA is considering change in capital structure : Beckman Engineering and Associates (BEA) is considering a change in its capital structure. BEA currently has $20 million in debt carrying a rate of 8%, and its stock price is $40 per share with 2 million shares outstanding. What is BEA's unlevered be..

Fix sum of payments to the beneficiary for a fee : In what type of contract does an insurance company agree to pay a fix sum of payments to the beneficiary for a fee?

Distinguish between an open-end fund and a closed-end fund : Distinguish between an open-end fund and a closed-end fund.

Costs associated with deposit outflows : ____ are insurance against the costs associated with deposit outflows.

User Account

All Pages