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6,9 and 10 can you please explain how to get the answer and show the answer 6. Calculating Cost of Debt [LO2] Viserion, Inc,, is
6,9 and 10 can you please explain how to get the answer and show the answer
6. Calculating Cost of Debt [LO2] Viserion, Inc,, is trying to determine its cost of debt. The firm has a debt issue outstanding with 23 years to maturity that is quoted at 103 percent of face value. The issue makes semiannual payments and has an embedded cost of 6 percent annually. What is the company's pretax cost of debt? If the tax rate is 21 percent, what is the aftertax cost of debt? 7. Calculating Cost of Debt [LO2] Jiminy's Cricket Farm issued a 30 -year, 6 percent semiannual bond three years ago. The bond currently sells for 93 percent of its face value. The company's tax rate is 22 percent. a. What is the pretax cost of debt? b. What is the aftertax cost of debt? c. Which is more relevant, the pretax or the aftertax cost of debt? Why? 8. Calculating Cost of Debt [LO2] For the firm in Problem 7, suppose the book value of the debt issue is $95 million. In addition, the company has a second debt issue on the market, a zero coupon bond with eight years left to maturity: the book value of this issue is $40 million, and the bonds sell for 67 percent of par. What is the company's total book value of debt? The total market value? What is your best estimate of the aftertax cost of debt now? 9. Calculating WACC [LO3] Targaryen Corporation has a target capital structure of 70 percent common stock, 5 percent preferred stock, and 25 percent debt. Its cost of equity is 10 percent. The cost of preferred stock is 5 percent, and the pretax cost ofStep by Step Solution
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