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Problem 14-6 Calculating Cost of Debt [LO2] Viserion, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with
Problem 14-6 Calculating Cost of Debt [LO2] Viserion, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 25 years to maturity that is quoted at 91 percent of face value. The issue makes semiannual payments and has an embedded cost of 5 percent annually 20:14 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. If the tax rate is 24 percent, what is the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct a. Pretax cost of debt b. Aftertax cost of debt 2.8301% 4320% Rge 4 of Next> 2 (Apdt Dear Potential ...pd 30 FI F2 F3 D FA 7 F5
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