Analyzing the after-tax cost of debt for firm

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Reference no: EM131920923

You are analyzing the after-tax cost of debt for a firm. You know that the firm’s 12-year maturity, 9.25 percent semiannual coupon bonds are selling at a price of $958.98. If these bonds are the only debt outstanding for the firm.

What is the current YTM of the bonds and after-tax cost of debt for this firm if the bonds are selling at par? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answers to 2 decimal places, e.g. 15.25%.)

YTM

After-tax cost of debt

Reference no: EM131920923

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