Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the table below.Coupon RateMaturityFace Value$8.50%Bond12346.708.208.70Aftertax cost of debtPrice Quote105.594.9104.3106.2%5 years8 years15.5 years25 yearsIf the corporate tax rate is 25 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., 32.16.25,000,00045,000,00050,000,00065,000,000

After tax cost of debt = Before tax cost of debt * (1-tax rate)Before tax cost of debt = YTM of the…

Answered: Ying Import has several bond issues…

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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Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. Coupon Bond Rate Price Quote Maturity Face Value $ 1 6.4% 106.36 6 years 44,000,000 234 7.9 114.92 9 years 39,000,000 7.6 113.47 16.5 years 59,000,000 7.2 102.71 26 years 66,000,000 If the corporate tax rate is 24 percent, what is the aftertax cost of the company's debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of debt %
Review the Bond Table below; all bonds have semi-annual payments. Security. Coupon Rate Face Value 0.00% $1,000 4.50% 5.00% 1-yr Treasury 5-yr Treasury 10-yr Treasury 5-yr Corporate (rated A) 10-year Corporate 8.40% (rated BBB) Multiple Choice O 4.80% O If a company wanted to issue a new Corporate Bond (10 years, A rating) for full price, what coupon rate would it have to offer? 6.90% 6.50% 7.75% 7.50% $1,000 $1,000 $1,000 None of the above $1,000 Price $ 965.90 $991.18 $976.94 $912.46 $1,044.66
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the table bel 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
Melekom Berhad has 16 years to maturity bond with a RM1,000.00 par value.The bond pays RM7S.00 a year in interest and is selling for RMSSO.OO. Thecompany's tax rate is 25%.Calculate the approximate yield to maturity and the after tax cost of debt.
Use the following data to calculate the Cost of Debt for the bond issues of Martin Corporation (one perecentage that represents the after tax cost for all the debt). Tax Rate = Face Value Current Price Coupon Rate Coupon payments per year Years remaining until maturity 20% Bond #1 $ 200,000,000 106.50 6.20% 2 12 Bond #2 $ 180,000,000 99.20 5.30% 2 15
Galvatron Metals has a bond outstanding with a coupon rate of 6.5 percent and semiannual payments. The bond currently sells for $1,905 and matures in 15 years. The par value is $2,000 and the company's tax rate is 21 percent. What is the company's aftertax cost of debt? Multiple Choice 3.89% 3.51% 5.54% 3.27% 4.46%
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the table below. Coupon Rate Maturity Face Value $ 8.90% Bond 1 2 3 6.80 8.60 9.20 Aftertax cost of debt Price Quote 106.8 93.4 105.8 96.5 % 4 years 6 years 14.5 years 25 years If the corporate tax rate is 25 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. 28,000,000 31,000,000 36,000,000 55,000,000
Dengar
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. Bond 1 2 3 4 Coupon Rate Price Quote 5.1% 6.7 Cost of debt 6.6 5.9 104.86 113.62 112.17 101.41 Maturity 5 years 8 years 15.5 years 25 years % Face Value $ If the corporate tax rate is 24 percent, what is the aftertax cost of the company's debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) 59,000,000 54,000,000 74,000,000 81,000,000
Mojo Mining has a bond outstanding that sells for $2,174 and matures in 18 years. The bond pays semiannual coupons and has a coupon rate of 7.14 percent. The par value is $2,000. If the company's tax rate is 21 percent, what is the aftertax cost of debt? Multiple Choice O O 6.07% 4.75% 534% 65th
Beckham Corporation has semiannual bonds outstanding with nine years to maturity that are currently priced at $894.08. If the bonds have a coupon rate of 5 percent, then what is the after- tax cost of debt for Beckham if its marginal tax rate is 27 percent? Complete the calculation as is done on Wall Street. 4.8% 2.4% 3.14% 6.5% Onone of these
Rappaport Industries has 7,000 perpetual bonds outstanding with a face value of $2,000 each. The bonds have a coupon rate of 6.9 percent and a yield to maturity of 7.2 percent. The tax rate is 35 percent. What is the present value of the interest tax shield? Multiple Choice $352,800 O $966.000 O $338,300 O $4,410.000 Examon

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