Before-tax cost of debt and after-tax cost of debtPersonal Finance ProblemDavid Abbot is interested in purchasing a bond issued by Sony. He has obtained the following information on the security:

Sony Bond
Par value $1000	Coupon interest rate 7.0%	Corporate tax rate 25%
Cost $910	Years to maturity 10

Answer the following questions:

a.Calculate the before-tax cost of the Sony bond using the bond's yield to maturity (YTM).

b.Calculate the after-tax cost of the Sony bond given the corporate tax rate.

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Part 1

a.Thebefore-tax cost of the Sony bond using the bond's yield to maturity (YTM) is __

Part 2

b.The after-tax cost of the Sony bond given the corporate tax rate is __