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  • May 24, 2007, 07:57 AM
    Mreyes79
    Cost of debt
    JB Inc. has $5million of outstanding debt with a coupon rate of 12%. Current yield to maturity is 14%. If the firm's tax rate is 40%, what is the cost of debt for JB?
  • Sep 28, 2009, 06:14 AM
    bunnyKutty

    Yield to maturity = 14%
    After-tax cost of debt = 14% (1 - 40%)
    = 8.4%
  • Sep 29, 2009, 12:04 AM
    morgaine300

    Sigh.

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