What is after-tax cost of debt in weighted average cost

Assignment Help Financial Management
Reference no: EM13933517

The coupon rate on a debt issue is 6%. If the yield to maturity on the debt is 9%, what is the after-tax cost of debt in the weighted average cost of capital if the firm's tax rate is 34%?

Reference no: EM13933517

Questions Cloud

What is the cost of capital for the proffered stock : The preferred stock of Julian Industries sells for $44 and pays $6 in dividends. The net price of the security after issuance costs is $39.16. What is the cost for the preferred stock? What is the cost of capital for the proffered stock as a percenta..
Purchase a corporate bond : You want to purchase a corporate bond. Ford has one available that matures in 2026 and is currently quoted at 108.75. You see that the coupon rate is quoted as 6.5 and the bond pays coupons on June and December 30th.It is now July 7th.What is the pri..
Write a summary on how the family psychology : Create a matrix or grid contrasting six to ten significant differences between an individual approach to psychology versus a family systems approach to psychology. Support each difference with an appropriate academic source.
Impact of major domestic troubles : Which was the greater of the Qing dynasty's problems during the 19th century: foreign encroachment, or domestic upheaval? (For instance, you may want to discuss the impact of the Opium Wars, the Sino-Japanese War, and other imperialist encroachment..
What is after-tax cost of debt in weighted average cost : The coupon rate on a debt issue is 6%. If the yield to maturity on the debt is 9%, what is the after-tax cost of debt in the weighted average cost of capital if the firm's tax rate is 34%?
Purchase treasury-bill : You want to purchase a Treasury-Bill, but do not know how much you will need to pay for it. You know you can estimate the price from the bid-ask quotes you see in the newspaper. The bill you are considering has 99 days to maturity and the bid and ask..
Determine the reactions on the beam : Determine the reactions on the beam at its support A in terms of the compression CA, shear VA, and bending moment MA.
Calculate the amount of heat : Calculate the amount of heat (in kJ) required to convert 74.6 g of water to steam at 100ºC. (Specific heat of water = 4.184 J/g • ºC; ?Hfus (H2O) = 6.01 kJ/mol; ?Hvap (H2O) = 40.79 kJ/mol).
Minimum impact on customers : What is the action plan that will minimize the impact on the company, keep it true to its history, and have minimum impact on customers? It is expected to be concise and should be an actionable blueprint.

Reviews

Write a Review

Financial Management Questions & Answers

  New debt and used this to buy back stock-after the recap

ABC Printing Inc. raised $140 million in new debt and used this to buy back stock. After the recap, ABC's stock price is $7.6. If ABC had 70 million shares of stock before the recap, how many shares, in millions, does it have after the recap? (Enter ..

  Calculate the annual premium by using the table lookup

Calculate the annual premium by using the table lookup for:

  What is the required rate of return on a stock with a beta

Assume that the risk-free rate is 2.5% and the expected return on the market is 8%. What is the required rate of return on a stock with a beta of 1.5?

  Simple interest on its accounts compounded annually

First Simple Bank pays 8.3 percent simple interest on its investment accounts. First Complex Bank pays interest on its accounts compounded annually. What rate should the bank set if it wants to match First Simple Bank over an investment horizon of 13..

  Non constant Growth Stock Valuation

Simpkins Corporation does not pay any dividends because it is expanding rapidly and needs to retain all of its earnings. However, investors expect Simpkins to begin paying dividends, with the first dividend of $0.60 coming 4 years from today.

  Bonds on the market making annual payments

Essary Enterprises has bonds on the market making annual payments, with seven years to maturity, a par value of $1,000, and selling for $950. At this price, the bonds yield 6 percent. What must the coupon rate be on the bonds?

  Compute NPV and IRR

How do you compute NPV and IRR from the following information?

  What is total cost of the line of credit

Your client is a biochemist who has discovered a technique to create a new biofuel. He estimates it will take him 2 years to make it economically feasible at a cost of $2,000,000. Assume that loan is set up as interest-only (meaning any accrued inter..

  In january ron a firefighter was injured in the line of

in january ron a firefighter was injured in the line of duty as a result of interference by a homeowner. he incurred

  How should the acquisition of midland freight be financed

Has anybody worked on the "Continental Carriers, Inc." case study? If so, what's the best response to the following question? How should the acquisition of Midland Freight be financed, taking into account to cost of comparisons and other appropriate ..

  Who will have social security benefits

Compare the tools as to how they would apply for a couple in their mid-50s who are classified as middle-income earners, with no dependents (two adult children), who will have Social Security benefits, and who will have retirement plan income from ..

  About the liquidity ratio

Josh Smith has compiled some of his personal financial data in order to determine his liquidity position. Calculate Josh’s liquidity ratio. Several of Josh’s friends have told him that they have liquidity ratios of about 1.8. How would you analyze Jo..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd