Question
Nobleford Inc. is trying to determine its cost of debt. The firm has a debt issue outstanding with 18 years to maturity that is quoted
Nobleford Inc. is trying to determine its cost of debt. The firm has a debt issue outstanding with 18 years to maturity that is quoted at 107 percent of face value. The issue makes semiannual payments and has an embedded cost of 6 percent annually. Assume the par value of the bond is $1,000.
What is the companys pretax cost of debt? (Do not round intermediate calculation and round your final answer to 2 decimal places. (e.g., 32.16)) |
Cost of debt | % |
If the tax rate is 35 percent, what is the aftertax cost of debt? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) |
Cost of debt | % |
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