Evaluate the after tax cost of the sony bond

Reference no: EM13526026

Message : Before tax cost of debt and after tax cost of debt; Personal finance problem. David Abbot is interested in purchasing a bond issued by Sony. He has obtained the following information on the security:

Par value $1000, coupon interest rate 8.0%, corporate tax rate 25%, cost $930, years to maturity 10 years.

a. Calculate the before tax cost of the sony bond using the bond's yield to maturity (YTM)

b. Calculate the after tax cost of the sony bond given the corporate rate tax

Reference no: EM13526026

Questions Cloud

What is the speed of the earth in miles per hour : The radius of the earth's orbit around the sun is approximately 90 million miles (90*10^6). What is the speed of the earth in miles per hour

Necessary trading security adjustments : What is net income (ignoring income taxes) after making any necessary trading security adjustments?

Legal and ethical justifications for strict liability : What are some legal and ethical justifications for strict liability?

How many grams of solid acetate must be added to acetic acid : How many grams of solid acetate (82.0 g/mole) should be added to 1.50 L of a 0.287 M acetic acid solution to prepare a buffer with a pH of 4.140. Grams of sodium acetate

Evaluate the after tax cost of the sony bond : Calculate the before tax cost of the sony bond using the bonds yield to maturity and calculate the after tax cost of the sony bond given the corporate rate tax

How high above the launch point does the ball hit the wall : You are playing raquetball at the rec center. When you are 10 m away from the wall you hit a ball 24 m/s towards the wall at an angle of 30 degrees. How high above the launch point does the ball hit the wall

Components of a good whistle-blower program-policy : Components of a good whistle?blower program/policy are:

How long does it take you to get to the other side : You are in a kayak which can move at a velocity of 4 m/s when in still water. You are attempting to cross a river which is 103 across, How long does it take you to get to the other side

How does graphene support induced pluripotent stem cells : How does graphene support Induced pluripotent stem cells culture and do different forms of graphene lead to distinct cell proliferation and differentiation characteristics

User Account

All Pages