If a corporation has an average tax rate of 40 percent, the approximate annual, after-tax cost of debt for a 10-year, 8 percent, $1,000 par value bond selling at $1,150 is
A. 3.6 percent.
B. 4.8 percent.
C. 6 percent.
D. 8 percent.
Answer:A
If a corporation has an average tax rate of 40 percent, the approximate annual, after-tax cost of debt for a 10-year, 8 percent, $1,000 par value bond selling at $1,150 is
A. 3.6 percent. B. 4.8 percent. C. 6 percent. D. 8 percent.