Company BW has $500,000 loan outstanding. The annual loan interest rate is 6% with monthly compounding (meaning BW is making monthly payments). Find the annual after-tax cost of debt for the loan. [10 points) (1) Company BW has issued 2,000 corporate bonds with a maturity value of $1,000 and a coupon rate of 6%. Coupon payments are made every 6 months and monthly payments). Find the annual after-tax cost of debt for the loan.

those bonds will mature in 6 months from today. Current market price of those bonds is $978.56. Marginal corporate income tax rate is 34%, find the annual after-tax cost of debt for these bonds. *** HINT: What have you found? Semi-annual rate or annual rate? (2) Company BW has $500,000 loan outstanding. The annual loan interest rate is 6% with monthly compounding (meaning BW is making

 

(2) Company BW has $500,000 loan outstanding. The annual loan interest rate is 6% with monthly compounding (meaning BW is making monthly payments). Find the annual after-tax cost of debt for the loan. [10 points]