Gaunt Computer Displays Plans to Issue Bonds to Finance Research

question 15

Multiple Choice

Gaunt Computer Displays plans to issue bonds to finance research and development for computer monitors that can be read while sleeping.The firm's investment bankers report that the bonds should be sold to yield 10%.What is Gaunt's cost of debt if its marginal tax rate is 30%?

• A) 3.0%
• B) 9.3%
• C) 9.0%
• D) 7.0%
• E) 10.0%

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Definitions:

American Business

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