Question

A firm Juxto has decided to issue bonds worth USD 250 million, which will be repaid...

A firm Juxto has decided to issue bonds worth USD 250 million, which will be repaid in full by the end of the project's period. Project is expected to last for 5 years. The cost of debt for 

the firm based on its creditworthiness is 10%, however the local municipality is willing to give debt at 0% , what is the benefit of these bonds to firm  if the country has no corporate 

tax rate? 


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Answer #1

Therefore, the benefit of these bonds to the firm is $ 94.77.

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