Calculate the before-tax cost of the sony bond

Reference no: EM13284975

David Abbot is interested in purchasing a bond issued by Sony. He has obtained the following information on the security:

SONY BOND

Par Value $1000 Coupon Interest Rate 6% Tax bracket 20%
Cost $ 930 Years to maturity 10

Answer the following questions.
a. calculate the before-tax cost of the Sony bond.
b. Calculate the after-tax cost of the Sony bond given David's tax bracket.

Reference no: EM13284975

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