What is avicorp pre-tax cost of debt

Assignment Help Finance Basics

Reference no: EM13267941

Avicorp has a $14.2 million debt outstanding, with a 6.1% coupon rate. The debt has semi-annual coupons, the next coupon is due in six months, and the debt matures in five years. It is currently priced at 94% of par value.

A. What is Avicorp's pre-tax cost of debt? Note: Compute the annual return.

B. If Avicorp's faces a 40% tax rate, what is its after-tax cost of debt?

Reference no: EM13267941

Questions Cloud

What is an estimate of steady company cost of equity : Steady Company's stock has a beta of 0.24. If the risk-free rate is 5.8% and the market risk premium is 7.1%, what is an estimate of Steady Company's cost of equity?

How much waste heat is produced : The engine of a large ship does 2.10 ? 108 J of work with an efficiency of 4.00%. How much waste heat is produced

Epidemiology-calculating morbidity and incidence : A chain restaurant in Florida is where this scenario takes place and you gathered your data. This restaurant chain wants to make sure that the people they hire will be steady and reliable employees

Explain a standard mixture containing : A standard mixture containing 2.00 ppm and 2.50 ppm gave a Fe / Mn signal ratio (quotient) of 1.05. A 5.00 mL unknown Fe solution was mixed with 1.00 mL solution containing 12.5 ppm Mn

What is avicorp pre-tax cost of debt : Avicorp has a $14.2 million debt outstanding, with a 6.1% coupon rate. The debt has semi-annual coupons, the next coupon is due in six months, and the debt matures in five years. It is currently priced at 94% of par value.

Find the altitude above which wispy cirrus clouds can occur : Puffy cumulus clouds, which are made of water droplets, occur at lower altitudes in the atmosphere. Find the altitude y (measured from sea level) above which wispy cirrus clouds can occur.

Illustrate what was the approximate mass of the methane : A 12-gram mixture of methane, CH4, and ethane, C2H6, is completely combusted in oxygen. If the total mass of H2O produced is 23.4 grams, what was the approximate mass of the methane in the original mixture

Find rms value of voltage source and average power delivered : A sinusoidal voltage source given by V(t)=100cos100pi*t V is applied across a 50-ohm resistor. (a) Plot v(t) to scale versus time. (b) Find the instantaneous power and plot it to scale versus time. (c) Find the rms value of the voltage source and the..

Leadership theories boosts an individuals confidence : Leadership theories boosts an individuals confidence to such a level that he can accomplish the limits. Innovation and entrepreneurial being one of them.

User Account

All Pages