Question
Can someone confirm the following is correct Advance, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with
Can someone confirm the following is correct
Advance, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 10 years to maturity that is quoted at 110 percent of face value. The issue makes semiannual payments and has a coupon rate of 8 percent. |
What is the company's pretax cost of debt?(Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
Pretax cost of debt | 6.62% |
If the tax rate is 35 percent, what is the aftertax cost of debt?(Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
Aftertax cost of debt | 4.30% |
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