AFP
CTP · Question #682
(Topic 7) For newly issued debt, a company's effective cost of debt is a function of yield to maturity and:
The correct answer is B. the marginal tax rate of the company. See the full explanation below for the reasoning.
Question
- (Topic 7)
For newly issued debt, a company’s effective cost of debt is a function of yield to maturity and:
Options
- Athe credit rating of the company.
- Bthe marginal tax rate of the company.
- Cthe maturity date of the debt instrument.
- Dthe price of the debt instrument.
How the community answered
(29 responses)- A14% (4)
- B72% (21)
- C3% (1)
- D10% (3)
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