Question
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. If the corporate tax rate
| Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. If the corporate tax rate is 33 percent, what is the aftertax cost of Ying's debt? |
| Bond | Coupon Rate | Price Quote | Maturity | Face Value | |
|---|---|---|---|---|---|
| 1 | 5.6% | 103 | 4 | years | $ 22,000,000 |
| 2 | 6.7 | 113 | 7 | years | 43,000,000 |
| 3 | 5.9 | 105 | 15.5 | years | 44,000,000 |
| 4 | 6.4 | 117 | 26.5 | years | 63,000,000 |
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Finance Directors Handbook
Authors: Glynis D Morris, Sonia McKay, Andrea Oates
5th Edition
1566768691, 978-1566768696
