K1evlynJennahaynada K1evlynJennahaynada
  • 20-04-2017
  • Business
contestada

?if a corporation issued $8,000,000 in bonds which pay 5% annual interest, what is the annual net cash cost of this borrowing if the income tax rate is 30%?

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Аноним Аноним
  • 04-05-2017
$8,000,000 - corporate issued
5 % -  annual interest
30 % - income tax rate
Annual net cash cost - ?

Formula and Solution - (8,000,000 x 0.05) x 0.7 = 280,000
Answer: The Annual net cash cost - $280,00
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