After tax cost of debt"The Heuser Company's currently outstanding bonds have a 10 percent coupon and a 12 percent yield to maturity.

After tax cost of debt"The Heuser Company's currently outstanding bonds have a 10 percent coupon and a 12 percent yield to maturity. Hauser believes it could new bonds at par that would provide yield to maturity. If its marginal tax rate is 35 percent, what is Hauser's after tax cost of debit?

Ans.Heuser CompanyCoupon rateYield to MaturityMarginal Tax RateAfter tax cost of debt[YTM x (1-Tax rate)] 10.00%12.00%35.00%7.80% YTM is considered to calculate after tax cost debtbecause...