Nico Trading Corporation is considering issuing long-term debt. The debt would have a 30-year maturity and a 10 percent coupon rate. In order to sell the issue, the bonds must be underpriced at a discount of 5 percent of face value. In addition, the firm would have to pay flotation costs of 5 percent of face value. The firm's tax rate is 21 percent. Given this information, the after-tax cost of debt for Nico Trading would be ________.
A) 7.26%
B) 8.82%
C) 2.34%
D) 11.17%
A) 7.26%
You might also like to view...
Stellar Corporation sells five different types of products. The company is divided for internal reporting purposes into five different divisions based on these five different product lines. The company should prepare the note disclosure for disaggregated information based upon the
a. five types of products. b. five different divisions. c. materiality of each product line based on the revenue or operating profits generated by each product line or the assets utilized by each product line. d. geographic areas in which the 5 products are sold.
Typical salespeople spend about 30 percent of their time in actual face-to-face selling situations
Indicate whether the statement is true or false
Starlight Jewelry sends Lauren a birthday card along with a pendant as a token of appreciation for shopping frequently at its store. This trend in customer relationship management aims at cultivating its customers by _____.
A. acknowledging their loyalty B. implementing technology C. providing time savings D. offering standardization
A(n) ________ refers to a security interest in property that was not in the possession of the debtor when the security agreement was executed
A) floating lien B) after-acquired property C) attachment D) future advance