Question

Chap 10 (1) see pic

The Holmes Company's currently outstanding bonds have an 8% coupon and a 13% yield to maturity. Holmes believes it could issue new bonds at par that would
provide a similar yield to maturity. If its marginal tax rate is 35%, what is Holmes' after-tax cost of debt? Round your answer to two decimal places.
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The Holmes Company's currently outstanding bonds have an 8% coupon and a 13% yield to maturity. Holmes believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 35%, what is Holmes' after-tax cost of debt? Round your answer to two decimal places. %

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