Bedrick has outstanding 10 year noncallable bonds with a face value of $1000. Current market price is $1495.56 & has a coupon rate of 10%. The tax rate for the company is 35%. The company wants to issue new debt, what would be an estimate for its after-tax cost of debt?
- 3.06%
- 2.30%
- 2.55%
- 2.93%