Olympic Sports has two issues of debt outstanding. One is a 9% coupon bond with...
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Finance
Olympic Sports has two issues of debt outstanding. One is a 9% coupon bond with a face value of $40 million, a maturity of 15 years. and a yield to maturity of 10%The coupons are paid annually The other bond issue has a maturity of20 years, with coupons also paid annually, and a coupon rate of 10%. The face value of the issue is $45 million, and the issue sells for 95% of par value. The firm's tax rate is 30%. a. What is the before tax cost of debt for Olympic? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Before-tax cost of debt b. What is Olympid's after-tax cost of debt? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. After tax cost of deb t IT 191
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