Several years ago the jakob company sold a $1,000 par value bond that now has 20 years to maturity and a 7.00% annual coupon that is paid semiannually. the bond currently sells for $825, and the company’s marginal tax rate is 40%. what is the after-tax cost of debt of the firm?
If several years ago, the Jakob company sold a $1,000 par value bond that now has 20 years to maturity and a 7.00% annual coupon that is paid semiannually, then the after-tax cost of debt of the firm will be 4.65%.
