Purchase Solution

Dublin International Corporation's marginal tax rate is 40%.

Not what you're looking for?

Ask Custom Question

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.

Purchase this Solution
Solution Summary

The solution determines the appropriate after tax cost of debt for Dublin International to use in capital budgeting analysis.

Solution Preview

The current YTM on the bonds outstanding is 8.5%

The Marginal Tax Rate is ...

Purchase this Solution
Free BrainMass Quizzes
SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

View More Free Quizzes
Related BrainMass Solutions

  • Risk & Return

    Given the following information, calculate the required return on MNO Corporation's common stock: ? MNO Corp.'s Common Stock Beta (ß) = 0.9 ? Risk-free rate = 5% ?

  • Evaluating projects: market risk and decision making

    asset ratio of 40%, that it considers optimal, and a marginal tax rate of 40%, identify the projects Ponza International should accept.

  • Cost of equity and WACC

    The firm's marginal tax rate is 40%. a. What is the component cost of the equity raised by selling new common stock? b. What is the maximum amount of new capital that can be raised at the lowest component cost of equity? c.

  • Cost of the equity

    The firm's marginal tax rate is 40%. What is the component cost of the equity raised by selling new common stock?

  • Cost of equity / WACC

    The firm's marginal tax rate is 40%. a.What is the component cost of the equity raised by selling new common stock? b.What is the maximum amount of new capital that can be raised at the lowest component cost of equity?

  • Calculating Tax Liability, Marginal Rate

    Thus the Corporation's taxable income is equal to $120,000. a) What is William's tax liability for 2012? b) What are William's marginal, average and effective tax rates, respectively?

  • Determining the Ex-Dividend Price

    marginal personal tax rate on dividends and Tg is the effective marginal tax rate on capital gains.

  • Effective tax rate on taxable income for Kammerling

    The effective tax rate is a simple calculation of tax / taxable income. The other tax rate more often mentioned is the marginal rate which speaks to the tax rate for the next dollar of income using the corporate charts.

  • Computing Corporate Income Tax

    $ 500,000 Tax is computed as: Portion of Marginal Income Income Tax Taxable Income x Tax Rate = Amount Due $ 50,000 .15 $ 7,500

View More Related Solutions