ABC has 20 million shares outstanding, trading at $20 per share….

Question ABC has 20 million shares outstanding, trading at $20 per share…. ABC has 20 million shares outstanding, trading at $20 per share. ABC currently has no debt, but plans to borrow $100 million on a permanent basis. It would use the borrowed funds to repurchase shares. Upon the announcement of this plan, ABC’s share price rose to $20.50. Assume that the discount rate on interest tax shields is 8% and the marginal corporate tax rate = 20%. What is ABC’s cost of debt?Express your answer in decimals. For example, express 7.5% as 0.075. Business Finance BUSINESS 25765 Share QuestionEmailCopy link Comments (0)