Several years ago, the ABC Company sold a $1,000 par value bond that now has 15 years to maturity and a 6.50% annual coupon that is paid semiannually. The bond currently sells for $980 and the company's tax rate is 35%. What is the after-tax cost of debt
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Several years ago, the ABC Company sold a $1,000 par
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- A Cricket Institute issued a 30 year, 8 percent semi-annual bond 3 year ago. The bond currently sells for 93 percent of its face value. The Company’s tax rate is 35%. What is the pre-taxed cost of debt? What is the after tax cost of debt? Which is more relevant, the pre-tax or the after- tax cost of debt and Why? Suppose the book value of the debt issues is $60 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 10 years to mature. The book value of this issue is $35 million and the bond sell for 57 percent of par What is the company’s total book value of debt, The total market value and What is your best estimate of the after-tax cost of debt now?Jones Cricket Institute issued a 30 year, 8 percent semiannual bond 3 years ago. The bond currently sells for 93 percent of its face value. The Company’s tax rate is 35%.a. What is the pre-taxed cost of debt?b. What is the after-tax cost of debt?c. Which is more relevant, the pre-tax or the after-tax cost of debt? Why? In the question above, suppose the book value of the debt issues is $60 million. In addition, the company has a second debt issue on the market, a zero-coupon bond with 10 years to mature. The book value of this issue is $35 million and the bond sells for 57 percent of par. a. What is the company’s total book value of debt?b. The total market value?c. What is your best estimate of the after-tax cost of debt now?Jones Cricket Institute issued a 30-year, 8 percent semi-annual bond 3 year ago. The bond currently sells for 93 percent of its face value. The Company’s tax rate is 35%. a. What is the pre-taxed cost of debt? b. What is the after-tax cost of debt? c. Which is more relevant, the pre-tax or the after- tax cost of debt? Why? In the question above, suppose the book value of the debt issues is $60 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 10 years to mature. The book value of this issue is $35 million and the bond sell for 57 percent of par. a. What is the company’s total book value of debt? b. The total market value? c. What is your best estimate of the after-tax cost of debt now?
- Severalyears ago, the ABC Company sold a $1,000 par value bond that now has 15 yearsto maturity and a 6.50% annual coupon that is paid semiannually. The bondcurrently sells for $980 and the company’s tax rate is 35%. What is theafter-tax cost of debt?Jiminiys cricket farm issued a 30 year.8 percent semiannual bond 3 years ago.the bond currently sells for 93 percent of it’s face value. The company’s tax rate is 35 percent. What is the pretax cost of debt?Jones Cricket Institute issued a 30 year, 8 percent semi-annual bond 3 year ago. The bond currently sells for 93 percent of its face value. The Company’s tax rate is 35%.i) a. What is the pre-taxed cost of debt? b. What is the after tax cost of debt? c. Which is more relevant, the pre-tax or the after- tax cost of debt? Why? ii) In question above, suppose the book value of the debt issues is $60 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 10 years to mature. The book value of this issue is $35 million and the bond sell for 57 percent of par.a. What is the company’s total book value of debt?b. The total market value?c. What is your best estimate of the after-tax cost of debt now?
- Jones Cricket Institute issued a 30 year, 8 percent semi-annual bond 3 year ago. The bond currently sells for 93 percent of its face value. The Company’s tax rate is 35%. What is your best estimate of the after-tax cost of debt now?Jones Cricket Institute issued a 30 year, 8 percent semi-annual bond 3 year ago. The bond currently sells for 93 percent of its face value. The Company’s tax rate is 35%. a) What is the pre-taxed cost of debt? Answer % b) What is the after tax cost of debt? Answer % c) Which is more relevant, the pre-tax or the after- tax cost of debt? Why? Answer In the question above, suppose the book value of the debt issues is $60 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 10 years to mature. The book value of this issue is $35 million and the bond sell for 57 percent of par. What is the company’s total book value of debt? $ Answer The total market value? $ Answer What is your best estimate of the after-tax cost of debt now? Answer %Jones Cricket Institute issued a 30 year, 8 percent semi-annual bond 3 year ago. The bond currently sells for 93 percent of its face value. The Company's tax rate is 35%. a. What is the pre-taxed cost of debt? b. What is the after tax cost of debt? c. Which is more relevant, the pre-tax or the after- tax cost of debt? Why?
- Jimiax's Cricket Farm issued a 15 year, 4percent semiannual coupon bond 2 years ago. The bond currently sells for 91 percent of its face value. The company's tax rate is 21 percent. What is the company's pretax cost of debt? What is the company's aftertax cost of debt?Freddy’s Farm issued a 25-year, 5 percent semiannual bond three years ago. The bond currently sells for 97 percent of its face value. The company’s tax rate is 21 percent. What is the pretax cost of debt? What is the after-tax cost of debt? Which is more relevant, the pretax or the after-tax cost of debt? Why?Years ago, Bustle Company sold a $1,000 par value bond that now has 25 years to maturity and an 8.00% annual coupon that is paid quarterly. The bond currently sells for $1,005, and the company's tax rate is 40%. What is the component cost of debt for use in the WACC calculation? MUST SHOW WORK O 5.04% O 5.02% 5.59% 6.29%