Homework #6E (Before and after-tax cost of debt financing)
February 19th, 2023
Homework #6E (Before and after-tax cost of debt financing) FinanceQuestion 2 (1 point) Great Seneca Inc. sells $100 million worth of 23-year to maturity 6.50% annual coupon bonds. The net proceeds (proceeds after flotation costs) are $985 for each $1,000 bond. The firm’s marginal tax rate is 40%. What is the after-tax cost of capital for this debt financing?Round the answer to two decimal places in percentage form. (Write the percentage sign in the “units” box)You should use Excel or financial calculator.Your Answer: