Question
Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc.
Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments. Bond A has a coupon rate of 4.0%; a price quote 104; maturity is 6 years; and the face value is $50,000. Bond B has a coupon rate of 6.5%; a price quote of 109; maturity is 9 years; and the face value is $30,000. Bond C has a coupon rate of 9.2%; a price quote of 95; maturity is 16 years; and the face value $60,000. Bond D has a coupon rate of 9.9%; a price quote of 110; maturity is 24 years; and the face value is $40,000.
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