Find what is company net after-tax interest cost

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Reference no: EM132762319

Your company needs to raise $50 million, and you want to issue 10-year annual coupon bonds to raise this capital. Suppose the market requires the return of your company's bonds to be 6%, and you decided to issue them at par,

Problem a. How many bonds would you need to issue?

Problem b. What will be the total expense to your company at the time when the bonds mature in year 10?

Problem c. Suppose your company is in the 38% tax bracket. What is your company's net after-tax interest cost associated with the bond issue at the time when the bonds mature in year 10?

Reference no: EM132762319

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