mpic sports has to issues of debt. Outstanding one is an 8% coupon with a face value of 24 million and a maturity of 15 years and a yield to maturity of 9%. The coupons are paid annually. The other bond issue has a maturity of 20 years with coupons also paid annually in a coupon rate of 9%. The face value of the issue is 29 million in the issues sell for 96% of par value. The firms tax rate is 30%. I have calculated the before tax cost of death correctly at 9.25%, but
mpic sports has to issues of debt. Outstanding one is an 8% coupon with a face value of 24 million and a maturity of 15 years and a yield to maturity of 9%. The coupons are paid annually. The other bond issue has a maturity of 20 years with coupons also paid annually in a coupon rate of 9%. The face value of the issue is 29 million in the issues sell for 96% of par value. The firms tax rate is 30%. I have calculated the before tax cost of death correctly at 9.25%, but
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
Problem 1PS
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Olympic sports has to issues of debt. Outstanding one is an 8% coupon with a face value of 24 million and a maturity of 15 years and a yield to maturity of 9%. The coupons are paid annually. The other bond issue has a maturity of 20 years with coupons also paid annually in a coupon rate of 9%. The face value of the issue is 29 million in the issues sell for 96% of par value. The firms tax rate is 30%.
I have calculated the before tax cost of death correctly at 9.25%, but still don't know the after-tax cost of death.
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