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CFA Level 1
Corporate Finance

Calculating After-Tax Cost of Debt

Medium Cost Of Capital Cost Of Debt

ABC Corporation is evaluating its cost of debt for financing a new project. Currently, the company has outstanding bonds with a coupon rate of 6% and a market price of 95. The bonds are expected to be at their maturity in 10 years. The company's tax rate is 30%. What is the after-tax cost of debt for ABC Corporation?

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