TC, Inc. has 15 million of outstanding bonds with a coupon rate of 10 percent. t

Question

TC, Inc. has 15 million of outstanding bonds with a coupon rate of 10 percent. the yield to maturity on these bonds is 12.5 percent. if the firms tax rate is 30 percent, what is relevant cost of debt financing to Kendall, inc.? TC, Inc. has 15 million of outstanding bonds with a coupon rate of 10 percent. the yield to maturity on these bonds is 12.5 percent. if the firms tax rate is 30 percent, what is relevant cost of debt financing to Kendall, inc.? TC, Inc. has 15 million of outstanding bonds with a coupon rate of 10 percent. the yield to maturity on these bonds is 12.5 percent. if the firms tax rate is 30 percent, what is relevant cost of debt financing to Kendall, inc.?

Explanation / Answer

Relavant cost of debt = 10%*(1-30%) = 7%

$15 million*7% = 1.05 million relavant cost

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.