J & B, Inc. has $5 million of debt outstanding with a coupon rate of 12 percent. Currently the yield to maturity on these bonds is 14 percent. If the firm's tax rate is 40 percent, what is cost of debt to J & b?© BrainMass Inc. brainmass.com March 4, 2021, 6:41 pm ad1c9bdddf
Cost of debt = After tax cost of debt = ...
After tax Cost of debt is calculated for a company using data on coupon rate, yield to maturity and tax rate.