Explore BrainMass
Share

Explore BrainMass

    After-Tax Cost of Debt and Maturity

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    The cost of debt: Beckham Corporation has semiannual bonds outstanding with 13 years to maturity and are currently priced at $746.16. If the bonds have a coupon rate of 8.5 percent, then what is the after-tax cost of debt for Beckham if its marginal tax rate is 35%? Assume that your calculation is made as on Wall Street.

    © BrainMass Inc. brainmass.com October 10, 2019, 6:57 am ad1c9bdddf
    https://brainmass.com/business/interest-rates/after-tax-cost-debt-maturity-562575

    Solution Summary

    The solution determines what is the after-tax cost of debt for Beckham if its marginal tax rate is 35%.

    $2.19