Question
Jiminy's Cricket Farm issued a20-year,4 percent semiannual coupon bond6 years ago. The bond currently sells for 95 percent of its face value. The company's tax
Jiminy's Cricket Farm issued a20-year,4 percent semiannual coupon bond6 years ago. The bond currently sells for 95 percent of its face value. The company's tax rate is 25 percent.
a.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.)
b.What is the company's aftertax cost of debt?
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Investments
Authors: Zvi Bodie, Alex Kane, Alan Marcus, Stylianos Perrakis, Peter
8th Canadian Edition
007133887X, 978-0071338875
