Alpha has an outstanding bond issue that has a 7.75% semiannual coupon, a current maturity of 20 years, and sells for $967.97. The firm's income tax rate is 40%. What should Alpha use as an after-tax cost of debt for cost of capital purposes?
A) 2.42%
B) 4.04%
C) 4.85%
D) 8.08%
Answer: C
You might also like to view...
Which department or group accounted for the maximum percentage of fraud incidents according to the study conducted by ACFE in 2010?
a. sales b. accounting c. human resources d. top management
Public speaking students frequently overlook
a. primary research. b. secondary research. c. formal research. d. informal research.
On January 1, 2012, Blackstone Company reported assets of $1,000,000 and liabilities of $600,000. During 2012 assets decreased by $200,000 and Equity decreased $250,000. What is the amount of Equity on December 31, 2012
A) $650,000 B) $150,000 C) $400,000 D) $800,000
If you can determine with confidence and accuracy the factor weights and factor evaluations, AHP is preferred
Indicate whether the statement is true or false