Issued bond-what is the aftertax cost of debt

Assignment Help Financial Management

Reference no: EM131063378

Jiminy’s Cricket Farm issued a bond with 25 years to maturity and a semiannual coupon rate of 6 percent 2 years ago. The bond currently sells for 92 percent of its face value. The company’s tax rate is 35 percent.

a. What is the pretax cost of debt? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Pretax cost of debt % ?

b. What is the aftertax cost of debt? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Aftertax cost of debt % ?

Reference no: EM131063378

Questions Cloud

Major information security threats : Write a 3-to 4-page paper on at least three major information security threats that a specific organization you choose faces today. This portion of the assignment should provide a foundation for the sections to be added in Weeks 3 and 4.

Determine the appropriate amounts to complete the schedule : Determine the appropriate amounts to complete the following schedule. Show computations, and round to the nearest dollar.

What is the companys cost of equity : The Absolute Zero Co. just issued a dividend of $3.40 per share on its common stock. The company is expected to maintain a constant 7 percent growth rate in its dividends indefinitely. If the stock sells for $68 a share, what is the company’s cost of..

Why do they believe it pays to pay differently : Think of a company that follows a lag policy and a company that follows a lead policy. Why do they believe it pays to pay differently? Can you think of any companies that follow performance driven and/or work/life balance policies?

Issued bond-what is the aftertax cost of debt : Jiminy’s Cricket Farm issued a bond with 25 years to maturity and a semiannual coupon rate of 6 percent 2 years ago. The bond currently sells for 92 percent of its face value. The company’s tax rate is 35 percent. What is the pretax cost of debt?

Discuss the exercise of freedom of expressions by some media : Discuss the exercise of freedom of expressions by some media

Regulating consumer privacy in companies : Using ethical philosophies, please discuss the ethical issues involved with companies that manage genetic products. Discuss what legal structures are currently in place regulating consumer privacy in companies handling genetic products.

Implement key exchange using the diffie-hellman algorithm : Implement key exchange using the Diffie-Hellman algorithm, when peer-to-peer connections are made between bots. Achieve condentiality through encryption of the client-server communications with an appropriate block or stream cipher

What is the tailor muscle of the body : What is the tailor muscle of the body?

User Account

All Pages