Calculating the Cost of Debt Ying Imports has several bond issues outstanding, each making semi-annual interest payments. The bonds are listed in the following table. If the corporate tax rate is 28 per cent, what is the after-tax cost of Ying’s debt? Assume the face value of the debt is

£1,000.

Bond Coupon rate

(%)

Price quote (%

of face value)

Maturity

(years)

Face value (£)

1 7.00 103.00 5 40,000,000 2 8.50 108.00 8 35,000,000 3 8.20 97.00 15½ 55,000,000 4 9.80 111.00 25 50,000,000