Question
Nobleford Inc. is trying to determine its cost of debt. The firm has a debt issue outstanding with 23 years to maturity that is quoted
Nobleford Inc. is trying to determine its cost of debt. The firm has a debt issue outstanding with 23 years to maturity that is quoted at 97% of face value. The issue makes semiannual payments and has an embedded cost of 5% annually. Assume the par value of the bond is $1,000.
What is the companys pre-tax cost of debt? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 3 decimal places.)
Pre-tax cost of debt %
If the tax rate is 35%, what is the after-tax cost of debt? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 3 decimal places.)
After-tax cost of debt %
PLEASE NO EXEL, I'M TRYING TO UNDERSTAND HOW TO CALCULATE. THANK YOU.
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