The firm after-tax component cost of debt

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Reference no: EM131938606

1. A firm has issued a bond. The bond has a 12% coupon, paid semiannually, a current maturity of 20 years, and sell for $1,171.59. The firm's marginal tax rate is 40%. What's the firm's after-tax component cost of debt?

5.0%

6.0%

7.0%

12%

2. You open a savings account on January 1, 2008 with $1,000. The interest rate stated on this account is 4%, compounded quarterly. What will your savings account be worth on December 31, 2012 assuming you made no deposits to or withdrawals from the account?

a. $1,220.19 4

b. $1,216.67

c. $1,240.41

d. $1,200.90

e. None of the above

Reference no: EM131938606

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