QUESTION
Nico Trading Corporation is considering issuing long-term debt. The debt would have a 30 year maturity and a 10 percent
Category: Business
Subject: Accounting
Due Date: 12/23/2016
Question Asked: 2016-12-16 02:16:41
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User: ZAZU2014
Rating: C+ (1)
Earnings: $11.00
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Nico Trading Corporation is considering issuing long-term debt. The debt would have a 30 year maturity and a 10 percent coupon rate. In order to sell the issue, the bonds must be underpriced at a discount of 5 percent of face value. In addition, the firm would have to pay flotation costs of 5 percent of face value. The firm's tax rate is 35 percent. Given this information, the after tax cost of debt for Nico Trading would be
A) 7.26%.
B) 11.17%.
C) 10.00%.
D) none of the above.
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Nico Trading Corporation is considering issuing long-term debt. The debt would have a 30 year maturity and a 10 percent
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Posted on 2016-12-16 02:16:41
Posted by:
User: ZAZU2014
Rating: C+ (1)
earnings: $11.00
Questions: 60
Tutorials: 30
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...he debt would have a 30 year maturity and a 10 percent coupon rate. In order to sell the issue, th...
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