Business, 25.11.2019 22:31 genyjoannerubiera

Tangshan mining is considering issuing long-term debt. the debt would have a 30 year maturity and a 12 percent annual coupon rate, with coupon payments paid semi-annually. in order to sell the issue, the $1,000 par value bonds must be sold at a discount of 2.5 percent of the par value. in addition, the firm would have to pay flotation or issuance costs of 2.5 percent of the par value. the firm's corporate tax rate is 40 percent. given this information, the after tax cost of debt for tangshan mining would be

a. 12.65%
b. 6.32%
c. 3.79%
d. 7.59%

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Tangshan mining is considering issuing long-term debt. the debt would have a 30 year maturity and a...

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