Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the table b Price Quote Bond 1 2 3 4 Coupon Rate 8.70% 6.90 8.40 8.90 106.7 93.7 105.5 95.3 Maturity 7 years 10 years 17.5 years Face Value $ 26,000,000 32,000,000 37,000,000 27 years 52,000,000 If the corporate tax rate is 22 percent, what is the aftertax cost of the company's debt? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Aftertax cost of debt %

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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Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the table below.
Bond
1
2
3
4
Coupon Rate
8.70%
6.90
8.40
8.90
Price Quote
106.7
93.7
105.5
95.3
Maturity
7 years
10 years
17.5 years
27 years
Face Value
$ 26,000,000
32,000,000
37,000,000
52,000,000
If the corporate tax rate is 22 percent, what is the aftertax cost of the company's debt?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
Aftertax cost of debt
%
Transcribed Image Text:Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the table below. Bond 1 2 3 4 Coupon Rate 8.70% 6.90 8.40 8.90 Price Quote 106.7 93.7 105.5 95.3 Maturity 7 years 10 years 17.5 years 27 years Face Value $ 26,000,000 32,000,000 37,000,000 52,000,000 If the corporate tax rate is 22 percent, what is the aftertax cost of the company's debt? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Aftertax cost of debt %
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