Question
Sunny, Corp., issued bonds with a par value of $1,000 and 5.5% coupon rate, 20 years left to maturity, and the price of these bonds
Sunny, Corp., issued bonds with a par value of $1,000 and 5.5% coupon rate, 20 years left to maturity, and the price of these bonds is selling at $1,120. The companys tax rate is 25 percent.
(1) What is the pre-tax cost of debt of the company?
(2) What is the after-tax cost of debt of the company?
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Financial Analysis With Microsoft Excel 2016
Authors: Timothy R. Mayes, Todd M. Shank
8th Edition
1337298042, 9781337298049
