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This question has 4 parts. Please assist with the correct answers Flotation costs and the cost of debt in March of 2020 PepsiCo, Inc. (PEP)
This question has 4 parts. Please assist with the correct answers
Flotation costs and the cost of debt in March of 2020 PepsiCo, Inc. (PEP) sold $750 million worth of 30 -year 4.75% coupon bonds that pay semi-annual interest. At the time the bonds were issued, the market paid $992.32 per bond and the flotation cost was $19.85 per bond. Pepsi's corporate tax rate is 21%. a. Ignoring flotation costs, what is Pepsi's before-tax and after-tax costs of debt? b. Considering flotation costs, what is Pepsi's before-tax and after-tax costs of debt? a. Ignoring flotation cost, Pepsi's before-tax cost of debt is \%. (Round to two decimal places.)Step by Step Solution
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