Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. If the corporate tax rate is 34 percent, what is the aftertax cost of Ying's debt?     Bond Coupon Rate Price Quote Maturity Face Value 1 6.4%      100      3 years        $ 18,000,000    2 7.4         107      6 years        39,000,000    3 6.7         97      19 years        46,000,000    4 7.8         107      31 years        64,000,000

Question

Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. If the corporate tax rate is 34 percent, what is the aftertax cost of Ying's debt? 

  

Bond

Coupon Rate

Price Quote

Maturity

Face Value

1 6.4%      100      3 years        $ 18,000,000   
2 7.4         107      6 years        39,000,000   
3 6.7         97      19 years        46,000,000   
4 7.8         107      31 years        64,000,000   
 

 

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