Western Gas & Electric Company (WGC) can borrow funds at an interest rate of 12.50% for a period of six years. Its marginal federal-plus-state tax rate is 25%. WGC's after-tax cost of debt is (rounded to two decimal places). At the present time, Western Gas & Electric Company (WGC) has 15-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,329.55 per bond, carry a coupon rate of 12%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 25%. If WGC wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places) ? (Note: Round your YTM rate to two decimal place.)
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Western Gas & Electric Company (WGC) can borrow funds at an interest rate of 12.50% for a period of six years. Its marginal ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Suppose a 10% increase in the price of aspirin leads to a 5% decrease in the quantity demanded of aspirin. the demand for aspirin, therefore, is
Answers (1)
Question 2. your company is evaluating new equipment that will cost $2,000,000. the equipment is in the macrs 3-year class and will be sold after 3 years for $150,000. use of the equipment will increase net working capital by 200,000.
Answers (1)
In free-enterprise systems around the world, there are A. no restrictions on business ownership or business activity. B. some restrictions on business activity but not on business ownership. C.
Answers (2)
Bari Jay, a gown manufacturer, received an order for prom dresses from China. Her cost is $45 a gown. If her markup based on selling price is 69%, what is the selling price of each gown? (Round your answer to the nearest cent.)
Answers (1)
There are 10 employees in a particular division of a company. their salaries have a mean of $70,000, a median of $55,000, and a standard deviation of $20,000. the largest number on the list is $100,000.
Answers (1)
New Questions in Business
What is accounting theory
Answers (1)
Most companies receiving a claim message tend to a. ignore the first phone call, e-mail, or letter. b. respond only to letters containing complaints that could result in lawsuits or financial harm. c.
Answers (1)
The demand curve of a monopolistically competitive firm A. is perfectly elastic. B. is horizontal because the firm must cut its price to sell more. C. is downwardminus-sloping because it sells an identical product. D.
Answers (1)
Scott Company had sales of $12,050,000 and related cost of goods sold of $7,100,000 for the year ending December 31, 20Y8. Scott provides customers a refund for any returned or damaged merchandise.
Answers (1)
Bill and sally kaplan have an annual spending plan that amounts to $104,000. if inflation is 4 percent a year for the next three years, what amount will the kaplans need for their living expenses three years from now?
Answers (1)