What is the pre-tax cost of debt for 10-year bonds issued 3 years ago if the current price is 101 andthe coupon rate is 6.5% ? Please solve in excelWhat is the pre-tax cost of debt for 10-year bonds issued 3 years ago if the current price is 101 and the coupon rate is 6.5%?

Step 1:We have to calculate the pre-tax cost of debt.We will use the RATE function in Excel to…

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Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 13Q: A company issued bonds with a $100,000 face value, a 5-year term, a stated rate of 6%, and a market...

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You issued debt in the form of bonds, with a face value of $1,000, and have 9 years until maturity. The bonds have an annual coupon rate of 7.8%, which are paid semiannually. a. The current price is $1,100. What is the pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e. g 12.34.) b. The tax rate is 22%. What is the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 12.34.)
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The interest rate on one-year Treasury bonds is 0.8 percent, the rate on two-year T-bonds is 0.9 percent, and the rate on three-year T-bonds is 1.0 percent. Using the expectations theory, compute the expected one-year interest rate in the second year (Year 2 only). Round your answer to one decimal place. % Using the expectations theory, compute the expected one-year interest rate in the third year (Year 3 only). Round your answer to one decimal place. %
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The coupon rate on an issue of debt is 9%. The yield to maturity on this issue is 12%. The corporate tax rate is 33 %. What would be the approximate after-tax cost of debt for a new issue of bonds? Note: Round your answer to 2 decimal places.
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What is the pre-tax cost of debt for 10-year bonds issued 3 years ago if the current price is 101 and the coupon rate is 6.5% ? Please solve in excel What is the pre-tax cost of debt for 10-year bonds issued 3 years ago if the current price is 101 and the coupon rate is 6.5%?