What is the before cost of debt for olympic

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Olympic Sports has two issues of debt outstanding. One is a 6% coupon bond with a face value of $35 million, a maturity of 10 years, and a yield to maturity of 7%. The other bond issue has a maturity of 15 years with coupons also paid annually and a coupon rate of 7%. The face value of the issue is $40 million, and the issue sells for 94% of par value. The firm's tax rate is 40%.

Problem 1: What is the before cost of debt for Olympic?

Problem 2: What is the after cost of debt?

Reference no: EM132992754

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