Question:gilbert inc. has bonds outstanding that were issued 5 years ago
with an original maturity of...
Question
gilbert inc. has bonds outstanding that were issued 5 years ago
with an original maturity of...
gilbert inc. has bonds outstanding that were issued 5 years ago
with an original maturity of 20 years. these pay interest
semiannually, and have a fixed coupon of 8.00%. today, each $1000
face value bond is selling for $1030. gilbert’s marginal tax rate
is 25%. assuming gilbert would like to issue new bonds today that
have the same remaining maturity as their existing bonds, we can
estimate gilbert’s pre-tax marginal cost of debt to be: