Ningbo Shipping, Which Has an Average Tax Rate of 40

question 125

Multiple Choice

Ningbo Shipping, which has an average tax rate of 40 percent, would like to estimate the after-tax cost of debt for a 15-year, 12 percent, $1,000 par value bond, selling at $950. Based on this information, the after-tax cost of debt is:

• A) 7.7%.
• B) 12.0%.
• C) 12.8%.
• D) 15%.

---

Definitions:

Survey

A research method used for collecting data from a predefined group of respondents to gain information and insights on various topics of interest.

Random Variable

A variable whose value is subject to variations due to chance.

Wait Time

The duration a person must wait before receiving a service or proceeding with an activity, often analyzed to improve efficiency in various operations.

Independent

Not influenced or controlled by others; in statistics, refers to variables that are not affected by other variables in the analysis.