What is the after-tax cost of debt for caldwell

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Reference no: EM131591174

Income for Caldwell Instruments is sufficiently high that if it increases its income by adopting a new project, then its marginal corporate income tax rate is 43.84%. (Caldwell operates solely in California, where the state corporate income tax rate of 8.84% is added to the federal rate.) Managers at Caldwell estimate that if the company issues bonds to help finance a new project, the yield required by investors will be 10.82%

What is the after-tax cost of debt for Caldwell?

Do not round at intermediate steps in your calculation. Express your answer in percent. Round to two decimal places. Do not type the % symbol.

Reference no: EM131591174

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