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Question 13) Cost of Debt - You're trying to determine the cost of debt in your firm. The firm has only a bond issue outstanding
| Question 13) | Cost of Debt - You're trying to determine the cost of debt in your firm. The firm has only a bond issue outstanding with 15 years to maturity that is quoted at 90 percent of face value. The bonds makes semiannual payments and has a coupon of 6 percent. What is the aftertax cost of debt if the tax rate is 24 percent? | ||||||||||
| (4 Points) | |||||||||||
| Price Now (%) | 90 | ||||||||||
| Face Value (%) | 100 | ||||||||||
| Coupon | 6.00% | ||||||||||
| Frequency | |||||||||||
| Years to Maturity | 15 | ||||||||||
| Pretax Cost of Debt (YTM) | |||||||||||
| Tax Rate | 24% | ||||||||||
| Aftertax cost of Debt | |||||||||||
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