Ask Experts Questions for FREE Help !
Ask
    myrabudiman's Avatar
    myrabudiman Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Sep 28, 2014, 12:11 AM
    Decline, Inc. is trying to determine its cost of debt. The firm has a debt issue out
    Decline, Inc. is trying to determine its cost of debt. The
    firm has a debt issue outstanding with 12 years to maturity
    that is quoted at 94 percent of face value. The issue makes
    semiannual payments and has an embedded cost of 7
    percent annually. What is the company’s pretax cost of
    debt?
    If the tax rate is 35 percent, what is the aftertax cost of
    debt?
    Luck0rN0t's Avatar
    Luck0rN0t Posts: 263, Reputation: 45
    Full Member
    		  
    #2

    Sep 29, 2014, 09:24 AM
    Homework question?
    smoothy's Avatar
    smoothy Posts: 25,490, Reputation: 2853
    Uber Member
    		  
    #3

    Sep 29, 2014, 11:27 AM
    Most definitely Homework. THey didn't take the time to cut and paste their work and their answer too apparently.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

As a firm initially substitutes debt for equity financing, what happens to the cost [ 0 Answers ]

If a firm uses too much debt financing why does the cost of capital rise? [ 0 Answers ]

If a firm uses too much debt financing, why does the cost of capital rise? [ 1 Answers ]

Am I answering this correctly? As a firm takes on more debt financing, risk of default and consequently bankruptcy increases. As the risk increases, a higher return on invetments is needed, which increases the overall cost of capital.

Firm's Bonds and Cost of Debt [ 17 Answers ]

If a firm's bonds are currently yielding 8% in the marketplace, why would the firm's cost of debt be lower? a) interest rates have changed b) additional debt can be issued more cheaply than the original debt c) there should be no difference; cost of debt is the same as the bond's market yield...

View more questions Search