Disregard tax shield from amortization of flotation costs

Assignment Help Finance Basics

Reference no: EM13285446

Suppose a company will issue new 20-year debt with a par value of $1,000 and a coupon rate of 9%, paid annually. The tax rate is 35%. If the flotation cost is 5% of the issue proceeds, then what is the after-tax cost of debt? Disregard the tax shield from the amortization of flotation costs. Round your answer to two decimal places.

Reference no: EM13285446

Questions Cloud

When the suspending threads make an angle of 10 degrees : A charge Q is placed on each sphere> the electric force of repulsion separates the spheres, and an equilibrium is reached when the suspending threads make an angle of 10 degrees. Assuming a gravitational force of 9.80(N/kg) and a negligible mass f..

Evaluate the van der waals equation : Without referring to a table, select from the following list the gas that has the largest value of b in the van der Waals equation: CH4, O2, H2O, CCl4, Ne.

How much risk you would be willing to accept : Analyze your own current financial situation to determine how much risk you would be willing to accept for a given return. Provide specific examples to support your response.

Evaluate the molarity of an aqueous solution : Calculate the molarity of an aqueous solution that is 5.20% by mass CaCl2, given that the density of the solution is 1.19 g/mL

Disregard tax shield from amortization of flotation costs : The tax rate is 35%. If the flotation cost is 5% of the issue proceeds, then what is the after-tax cost of debt? Disregard the tax shield from the amortization of flotation costs. Round your answer to two decimal places.

Explain completely titrate of weak monoprotic acid : 41.89 mL of NaOH were required to completely titrate 25.00 mL of a weak monoprotic acid. After 11.90 mL of sodium hydroxide had been added to the solution, the pH of the solution was 6.81. Calculate K_a_ and pK_a_ for this weak acid.

Find the temperature of the air sample : The density of a sample of air is 1.205 kg/m3, and the bulk modulus is 1.42 105 N/m2, Find the temperature of the air sample

What key factors and elements are at play : Does this change in the facts alter your conclusion regarding the scenario above? Why or why not? What key factors and elements are at play?

Construct a combinational circuit that has a 4-bit bcd digit : The circuit also has a single bit output V. If the 4-bit input is not a valid 8421 BCD digit, V = 0; else V = 1. If V = 0, (the input is not valid) the gray code BCD outputs are don't cares.

User Account

All Pages