Question
Great Lakes Packing has two bond issues outstanding. The first issue has a coupon rate of 3.80 percent, a par value of $2,000 per bond,
Great Lakes Packing has two bond issues outstanding. The first issue has a coupon rate of 3.80 percent, a par value of $2,000 per bond, matures in 5 years, has a total face value of $5.1 million, and is quoted at 105 percent of face value. The second issue has a coupon rate of 6.57 percent, a par value of $1,000 per bond, matures in 15 years, has a total face value of $9.4 million, and is quoted at 108 percent of face value. Both bonds pay interest semiannually. The company's tax rate is 21 percent. What is the firm's weighted average aftertax cost of debt? Multiple Choice 4.72% 2.55% 3.77% 6.94% 2.69%
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