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Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed...

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Finance

Ying Import has several bond issues outstanding, each makingsemiannual interest payments. The bonds are listed in the followingtable. If the corporate tax rate is 33 percent, what is theaftertax cost of Ying's debt?

  

Bond

Coupon Rate

Price Quote

Maturity

Face Value

15.9%     108     3 years       $ 19,000,000   
26.5        116     6 years       37,000,000   
35.7        111     16 years       40,000,000   
46.6        126     30 years       56,000,000   

Answer & Explanation Solved by verified expert
3.8 Ratings (560 Votes)
Number of bonds FVpar value Bond 119000000100019000 Bond 237000000100037000 Bond 340000000100040000 Bond 456000000100056000 Bond 1 K Nx2 Bond Price Coupon1 YTM2k Par value1 YTM2Nx2 k1 K 3x2 1080 5910002001 YTM200k 10001 YTM2003x2 k1 YTM 309 Bond 2 K Nx2 Bond Price Coupon1 YTM2k Par value1    See Answer
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Transcribed Image Text

Ying Import has several bond issues outstanding, each makingsemiannual interest payments. The bonds are listed in the followingtable. If the corporate tax rate is 33 percent, what is theaftertax cost of Ying's debt?  BondCoupon RatePrice QuoteMaturityFace Value15.9%     108     3 years       $ 19,000,000   26.5        116     6 years       37,000,000   35.7        111     16 years       40,000,000   46.6        126     30 years       56,000,000   

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