Suppose MAM Industries also issued a 30-year bond five years ago it has a $1,000 face value and a 10% coupon.
If the bond currently sell for $1,000, what is the after-tax costs of debt capital, as indicated by the market value of this outstanding bond?
Suppose five years from now the MAM bond described in 4.2a has a market price of $1, 100. What is the after-tax cost of debt capital at that time?