Beckham Corporation has semiannual bonds outstanding with nine years to maturity that are currently priced at $794.08. If the bonds have a coupon rate of 7.25 percent, then what is the after-tax cost of debt for Beckham if its marginal tax rate is 35 percent? Complete the calculation using the effective annual interest rate (EAR) for the bond.
A) 7.084%
B) 11.750%
C) 12.095%
D) 7.277%
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