Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in

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Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. If the corporate tax rate is 22 percent, what is the aftertax cost of the company’s debt?

Bond Price Quote 103.18 Coupon Rate 5.00% Maturity Face Value 5 years $45,000,000 40,000,000 8 years 152years 7.10 112.8

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Fundamentals of Corporate Finance

ISBN: 978-1260153590

12th edition

Authors: Stephen M. Ross, Randolph W Westerfield, Robert R. Dockson, Bradford D Jordan

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Question Posted: Jul 17, 2019 11:38 AM

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Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in

Question:

Bond Price Quote 103.18 Coupon Rate 5.00% Maturity Face Value 5 years $45,000,000 40,000,000 8 years 152years 7.10 112.80 107.45 3 6.30 50,000,000 25 years 4 5.90 102.75 65,000,000

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To find the aftertax cost of debt for the company we need to find the weighted average of the four d...View the full answer

Fundamentals of Corporate Finance

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