A company has $20 million of debt outstanding with a coupon rate of 7%. Currently the yield to maturity on these bonds is 10.50%. If the firm's tax rate is 40%, what is relevant cost of debt financing to this company (round your answer to two decimal places)?
Added by Amy M.
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The formula for this is: After-tax cost of debt = Yield to maturity * (1 - Tax rate) Show more…
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