Question
You know that the after-tax cost of debt capital for carla vista is 10.5%. Assume that the firm has only one issue of 5-year bonds
You know that the after-tax cost of debt capital for carla vista is 10.5%. Assume that the firm has only one issue of 5-year bonds outstanding The bonds make semiannual coupon payments and the marginal tax rate is 30%?
CALCULATE THE PRE TAX COST OF DEBT CAPITAL Pre-tax cost of debt capital = after-tax cost of debt capital/(1-marginal tax rate) 15.00%
WHAT IS THE CURRENT PRICE OF THE BONDS IF THE COUPON RATE ON THOSE BONDS IS 15%?
I did the pre-tax cost but I couldn't do number 2 using PV in excel
Rate: ?
Nper: ?
Pmt: ?
Fv: ?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Climate Finance Theory And Practice
Authors: Anil Markandya, Ibon Galarraga, Dirk Rübbelke
1st Edition
9814641804, 978-9814641807
