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What is asbury after-tax cost of debt

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Question - Asbury Corp. issued 30-year bonds 11 years ago with a coupon rate of 9.5%. Those bonds are now selling to yield 7%. The firm also issued some 20-year bonds 2 years ago with an 8.7% coupon rate. The two bond issues are rated equally by Standard and Poors and Moody's. Asbury's marginal tax rate is 34%. Assume face value of the bonds is $1,000. Assume that the coupon payments are semi-annual.

1. What is Asbury's after-tax cost of debt?

2. What is the current selling price of the 20-year bonds?

Reference no: EM133090994

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