Question
Please explain in equation Great Lakes Packing has two bond issues outstanding. The first issue has a coupon rate of 3.46 percent, a par value
Please explain in equation
Great Lakes Packing has two bond issues outstanding. The first issue has a coupon rate of 3.46 percent, a par value of $1,000 per bond, matures in 4 years, has a total face value of $3.4 million, and is quoted at 105 percent of face value. The second issue has a coupon rate of 5.78 percent, a par value of $2,000 per bond, matures in 19 years, has a total face value of $ 7.7 million, and is quoted at 93 percent of face value. Both bonds pay interest semiannually. The company's tax rate is 35 percent. What is the firm's weighted average after-tax cost of debt?
a. 4.13% b. 3.03% c.3.25% d 5% e. 2.81%
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