What is the aftertax cost of the company debt

Assignment Help Financial Management

Reference no: EM132036548

Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table.

Bond, Coupon Rate, Price Quote, Maturity Face. Value

1 5.0%, 104.86, 5 years, $ 30,000,000

2 6.5%, 113.52, 8 years, 25,000,000

3 6.2%, 112.07, 15.5 years, 45,000,000

4 5.8%, 101.31, 25 years, 40,000,000

If the corporate tax rate is 30 percent, what is the aftertax cost of the company’s debt? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Cost of debt %

Reference no: EM132036548

Questions Cloud

Rule under the uniform principle and income act : The _____ rule under the Uniform Principle and Income Act (UPIA) states that the trust should be taxed on the balance left over income,

Decides to repurchase stock instead of retiring its debt : What is the value of OPC if it decides to repurchase stock instead of retiring its debt? What is the value of OPC if it chooses to retire all of its debt.

What is the expected return on the company debt : What payoff do bondholders expect to receive in the event of a recession? What is the expected return on the company’s debt?

Explain which is the most liquid of these investments : The stock market and the bond market. Explain which is the most liquid of these investments? Do you think this explains the different rates of return?

What is the aftertax cost of the company debt : If the corporate tax rate is 30 percent, what is the aftertax cost of the company’s debt?

Value of the company due to expected bankruptcy costs : The corporate tax rate is 35 percent. What is the decrease in the value of the company due to expected bankruptcy costs?

What is williamson unlevered cost of equity capital : What is the expected return on Green’s equity before the announcement of the debt issue? What is Williamson’s unlevered cost of equity capital?

Repurchase part of common stock by issuing corporate debt : Locomotive Corporation is planning to repurchase part of its common stock by issuing corporate debt.

Medical practice of which the legal entity is an llp : Your client is Dr. Quack, an MD who owns 100% of her medical practice of which the legal entity is an LLP.

User Account

All Pages