Dublin International Corporation's marginal tax rate is 40%. It can issue 3-year bonds with a coupon rate of 8.5% and par value of $1,000. The bonds can be sold now at a price of $938.90 each. The underwriters will charge $25 per bond in flotation costs. Determine the appropriate after tax cost of debt for Dublin International to use in capital budgeting analysis.© BrainMass Inc. brainmass.com June 4, 2020, 2:15 am ad1c9bdddf
The current YTM on the bonds outstanding is 8.5%
The Marginal Tax Rate is ...
The solution determines the appropriate after tax cost of debt for Dublin International to use in capital budgeting analysis.