l Food Supplies Corporation sold an issue of 10-year bonds. The bonds sold at a $980 price each. The issuance costs is $4 for each bond. That is, after issuance costs, Seoul Food Supplies received $976 each. The face value of the bond is $1,000. The coupon rate is 8% and paid annually. What is the after-tax cost of debt for these bon

l Food Supplies Corporation sold an issue of 10-year bonds. The bonds sold at a $980 price each. The issuance costs is $4 for each bond. That is, after issuance costs, Seoul Food Supplies received $976 each. The face value of the bond is $1,000. The coupon rate is 8% and paid annually. What is the after-tax cost of debt for these bon

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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5 years ago, Barton Industries issued 25-year noncallable, semiannual bonds with a $1,000 face value and an 8% coupon, semiannual payment ($40 payment every 6 months). The bonds currently sell for $894.87. If the firm's marginal tax rate is 25%, what is the firm's after-tax cost of debt? Do not round intermediate calculations. Round your answer to two decimal places.
Georga's Restaurants has 7,000 bonds outstanding with a face value of $1,000 each, a market price of $982, and a coupon rate of 6.95 percent. The interest is paid semiannually. What is the amount of the annual interest tax shield if the tax rate is 23 percent?
jiminy's cricket farm issued a 30-year, 7 percent semiannual bond 3 years ago. the bond currently sells for 93 percent of its face value. the compnay's tax rate is 22 percent. what is the pretax cost of debt? what is the aftertax cost of debt Please use Excel Formulas
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