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What will the after-tax cost of debt be

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Question 1: A 17-year zero-coupon bond was issued with a $1,000 par value to yield 11%. What is the approximate market value of the bond? Use Appendix B. (Round "PV Factor" to 3 decimal places and final answer to the nearest dollar amount.)

  1. $340
  2. $128
  3. $170
  4. $255

Question 2: Tobin's Barbeque has a bank loan at 10% interest and an after-tax cost of debt of 6%. What will the after-tax cost of debt be when the loan is due if a new loan is taken out yielding 11%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

  1. 6.60%
  2. 11.65%
  3. 4.05%
  4. None of these options are true.

Reference no: EM132467639

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