calculating after-tax cost of debt
this is example 48-4 of reading 48
valence industries issues a bond to finance a new project. it offers a 10-year, 5% semi-annual coupon bond. upon issue, the bond selss at $1025. what is valence’s before-tax cost of debt? if valence’s marginal tax rate is 35%, what is valence’s after-tax cost of debt?
and in the solution, it says as given
FV = $1000
i am not sure why the future value is $1000
Study together. Pass together.
Join the world's largest online community of CFA, CAIA and FRM candidates.