What will be the firm after-tax cost of debt on the bond

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Question: (Cost of debt) LLC International is issuing a $2,000 par value bond that pays 8 percent annual interest and matures in 10 years. Investors are willing to pay $1,800 for the bond. Floatation costs will be 4 percent of market value. The Company is in a 20 percent tax bracket. What will be the firm's after-tax cost of debt on the bond?

Reference no: EM131488339

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What will be the firm after-tax cost of debt on the bond : (Cost of debt) LLC International is issuing a $2,000 par value bond that pays 8 percent annual interest and matures in 10 years. Investors are willing to pay.

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