Author Question: If a corporation has an average tax rate of 40 percent, the approximate annual, after-tax cost of ... (Read 16 times)

dejastew · **on:** Jul 11, 2018

If a corporation has an average tax rate of 40 percent, the approximate annual, after-tax cost of debt for a 10-year, 8 percent, 1,000 par value bond selling at 1,150 is ________.

A) 3.6 percent
B) 4.8 percent
C) 6 percent
D) 8 percent

Question 2

A call feature is a feature included in all corporate bonds and allows the issuer to repurchase bonds at the market price prior to maturity.

Indicate whether the statement is true or false