Corporation is considering issuing long-term debt

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A corporation is considering issuing long-term debt. the debt would have a 30 year maturity and a 10 percent coupon rate and annual payments. the bonds will be sold for $950. additionally, the firm would have to pay floatation costs of 5 percent. the firm's tax rate is 35%. given this information, the after tax cost of debt for the corporation would be

a) 9.16% b) 11.13% c) 8.16% d) 7.24% E) none of the above

Reference no: EM131176510

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