What is holmes after-tax cost of debt

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1. The Golden Eagle Company purchased a computer system two and a half years ago for $34700. What is the book value of the computer system if the first year's depreciation percentage is 20% and the second year's depreciation percentage is 32%

2. The Holmes Company's currently outstanding bonds have a 8% coupon and a 13% yield to maturity. Holmes believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 40%, what is Holmes's after-tax cost of debt? Round your answer to two decimal places.

Reference no: EM132036810

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