What is the tax before tax cost of debt for olympic

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Reference no: EM131900707

Olympic sports has two issues of debt outstanding one is 8% coupon bond with a face value of 24 million a maturity of 15 years and a yield to maturity of 9%. The coupons are paid annually the other bond issues has a maturity of 20 years. With coupons also paid annually and a coupon rate of 9%. The face value of the issue is 29 million and the issue sells for 96% of the par value. The firs tax rate is 30%.

What is the tax before tax cost of debt for Olympic.

Reference no: EM131900707

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