The Heuser Company's currently outstanding bonds have a 10 percent coupon and a 12 percent yield to maturity. Heuser believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 35 percent, what is Heuser's after-tax cost of debt (please show all calculations)?© BrainMass Inc. brainmass.com June 3, 2020, 9:42 pm ad1c9bdddf
Heuser's after-tax cost of debt= Yield to maturity*(1-tax rate)
= 7.8%= Answer
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This explains the computation of after tax cost of debt for Heuser Company