Question
The Ralston Road Warriors have issued four bonds which are listed in the following table. If the corporate tax rate is 33 percent, what is
The Ralston Road Warriors have issued four bonds which are listed in the following table. If the corporate tax rate is 33 percent, what is the company's after-tax cost of debt (NOTE: you don't need to convert rates from an APR to an EAR) (Do not round your intermediate calculations.) |
Bond | Coupon Rate | Yield to Maturity | Price Quote (% of Face Value) | Maturity | Face Value |
1 | 5.90% | 5.59% | 102% | 8 years | $ 20,000,000 |
2 | 7.10% | 5.77% | 110% | 10 years | $ 35,000,000 |
3 | 5.90% | 5.66% | 103% | 22 years | $ 42,000,000 |
4 | 6.80% | 5.69% | 117% | 36 years | $ 59,000,000 |
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