Finance/370 problem help please

Business & Finance
Tutor: None Selected Time limit: 1 Day

Sep 14th, 2015

Thank you for the opportunity to help you with your question! IF you have any clarification, please don't hesitate to ask and I will do my best to answer. ++++++++++++

Step 1. Compute for the market interest rate, that is the intererst rate that will result to a net present value of the bond for $946.

Market interest rate = 14.49%

Step 2. Compute the after tax cost of the market interest rate.

After tax cost of debt = 14.49% x (1-34%)= 9.57%

Please let me know if you need any clarification. I'm always happy to answer your questions.
Sep 14th, 2015

Thank you! I still need some help. I posted another one

Sep 15th, 2015

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