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.
Bond
Coupon Rate
Price Quote
Maturity
  Face Value
1
5.5
%
105.26
5
years
$
55,000,000
2
7.1
114.02
8
years
50,000,000
3
7.0
112.57
15.5
years
70,000,000
4
6.3
101.81
25
years
77,000,000
If the corporate tax rate is 25 percent, what is the aftertaxcost of the company’s debt? (Do not round intermediatecalculations and enter your answer as a percent rounded to 2decimal places, e.g., 32.16.)
Cost of debt
%
Answer & Explanation
Solved by verified expert
4.2 Ratings (776 Votes)
Number of bonds FVpar value Bond 155000000100055000 Bond 250000000100050000 Bond 370000000100070000 Bond 477000000100077000 Bond 1 K Nx2 Bond Price Coupon1 YTM2k Par value1 YTM2Nx2 k1 K 5x2 10526 5510002001 YTM200k 10001 YTM2005x2 k1 YTM 432 Bond 2 K Nx2 Bond Price Coupon1 YTM2k Par value1
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