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

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter11: Determining The Cost Of Capital
Section: Chapter Questions
Problem 9P: Bond Yield and After-Tax Cost of Debt A companys 6% coupon rate, semiannual payment, 1,000 par value...
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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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