?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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asked Dec 19, 2018 46.1k views

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Cherice · Answer 1 · 2018-12-24T16:01:27+0000

$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

?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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