March of 2020 PepsiCo, Inc. (PEP) sold $750 million worth of 25-year 500% coupon bonds that pay semi-annual interest. At the time the bonds were issued, the market paid $1,004 21 per bond d. Pepsis corporate tax rate is 21% s before-tax and after-tax costs of debt? psis before tax and after tax costs of debt? tax cost of debt is (Round to two decimal places) cost of debt is (Round to two decimal places) wore-tax cost of debt is% (Round to two decimal places) ax cost of debt is (Round to two decimal places)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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March of 2020 PepsiCo, Inc. (PEP) sold $750 million worth of 25-year 5.00% coupon bonds that pay semi-annual interest. At the time the bonds were issued, the market paid $1,004 21 per bond
d. Pepsis corporate tax rate is 21%
s before-tax and after-tax costs of debt?
epsis before tax and after-tax costs of debt?
tax cost of debt is% (Round to two decimal places)
cost of debt is% (Round to two decimal places)
ore-tax cost of debt is
(Round to two decimal places)
x cost of debt is % (Round to two decimal places)
C
Transcribed Image Text:March of 2020 PepsiCo, Inc. (PEP) sold $750 million worth of 25-year 5.00% coupon bonds that pay semi-annual interest. At the time the bonds were issued, the market paid $1,004 21 per bond d. Pepsis corporate tax rate is 21% s before-tax and after-tax costs of debt? epsis before tax and after-tax costs of debt? tax cost of debt is% (Round to two decimal places) cost of debt is% (Round to two decimal places) ore-tax cost of debt is (Round to two decimal places) x cost of debt is % (Round to two decimal places) C
Flotation costs and the cost of debt in March of 2020 PepsiCo, Inc. (PEP) sold $750 million worth of 25-year 5.00% coupon bonds that pay se
and the flotation cost was $19.83 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.)
Ignoring flotation cost, Pepsi's after-tax cost of debt is% (Round to two decimal places)
b. Considering flotation cost, Pepsi's before-tax cost of debt is% (Round to two decimal places)
Considering flotation cost, Pepsi's after-tax cost of debt is %. (Round to two decimal places)
Transcribed Image Text:Flotation costs and the cost of debt in March of 2020 PepsiCo, Inc. (PEP) sold $750 million worth of 25-year 5.00% coupon bonds that pay se and the flotation cost was $19.83 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.) Ignoring flotation cost, Pepsi's after-tax cost of debt is% (Round to two decimal places) b. Considering flotation cost, Pepsi's before-tax cost of debt is% (Round to two decimal places) Considering flotation cost, Pepsi's after-tax cost of debt is %. (Round to two decimal places)
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