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    After tax Cost of debt

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    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?

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    https://brainmass.com/business/bond-valuation/after-tax-cost-of-debt-56837

    Solution Preview

    Cost of debt = After tax cost of debt = ...

    Solution Summary

    After tax Cost of debt is calculated for a company using data on coupon rate, yield to maturity and tax rate.

    $2.19

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