What is the company pretax cost of debt

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Reference no: EM131059983

Nobleford Inc. is trying to determine its cost of debt. The firm has a debt issue outstanding with 18 years to maturity that is quoted at 107 percent of face value. The issue makes semiannual payments and has an embedded cost of 6 percent annually. Assume the par value of the bond is $1,000.

a) What is the company’s pretax cost of debt?

b) If the tax rate is 35 percent, what is the aftertax cost of debt?

Reference no: EM131059983

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What is the company pretax cost of debt : Nobleford Inc. is trying to determine its cost of debt. The firm has a debt issue outstanding with 18 years to maturity that is quoted at 107 percent of face value. What is the company’s pretax cost of debt? If the tax rate is 35 percent, what is the..

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