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

Reference no: EM131488339

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

Questions Cloud

Large number of possible responders : Online questionnaires enable companies to gather data from a large number of possible responders. For a web-based questionnaire.

What is alfa cost of equity for the new issue : (Cost of equity) In early 2016, Alfa Corporation issued new common stock at a market price of $30. Dividends last year were $2.00 and are expected to grow.

Business impact analysis and risk management : "Business Impact Analysis (BIA) and Risk Management" Please respond to the following:

Calculate and display the sum : Write a C# program that ask the user for two numbers then calculate and display the sum

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.

How supply chain management has helped a company : Cite and explain 2 examples of how supply chain management has helped a company to improve efficiency and effectiveness.

Network would work best with each protocol : List three major dynamic routing protocols and explain what kind of network would work best with each protocol.

What is the after-tax cost of capital to zephyr for bonds : (Cost of preferred stock) The preferred stock of LLC International sells for $35 and pays 5 percent dividends. The net price of the stock is $30.

Relationship exists between the instructors : Explain what type of relationship exists between the instructors and the classes they teach.

User Account

All Pages