A corporate bond has a face value of 1000 and a coupon rate, Financial Management

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A corporate bond has a face value of 1000 and a coupon rate

A corporate bond has a face value of $1,000 and a coupon rate of 5%. The bond matures in 15 years and has a current market price of $950. If the corporation sells more bonds it will incur flotation costs of $25 per bond. If the corporate tax rate is 35%, what is the after-tax cost of debt capital?

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Financial Management: A corporate bond has a face value of 1000 and a coupon rate

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Financial Management: A corporate bond has a face value of 1000 and a coupon rate

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