Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the table bel Bond 1 Coupon Rate 8.70% Price Quote 106.2 Maturity Face Value $ 7 years 10 years 17.5 years 27 years 21,000,000 37,000,000 42,000,000 57,000,000 234 6.70 8.40 8.90 94.2 105.0 94.8 If the corporate tax rate is 22 percent, what is the aftertax cost of the company's debt? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Aftertax cost of debt 5.14 %
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the table bel Bond 1 Coupon Rate 8.70% Price Quote 106.2 Maturity Face Value $ 7 years 10 years 17.5 years 27 years 21,000,000 37,000,000 42,000,000 57,000,000 234 6.70 8.40 8.90 94.2 105.0 94.8 If the corporate tax rate is 22 percent, what is the aftertax cost of the company's debt? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Aftertax cost of debt 5.14 %
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter10: Long-term Liabilities
Section: Chapter Questions
Problem 10.3E: Issue Price The following terms relate to independent bond issues: 500 bonds; $1,000 face value; 8%...
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Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the table bel If the corporate tax rate is 22 percent, what is the aftertax cost of the company's debt? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Aftertax cost of debt
Transcribed Image Text:Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the table bel
Bond
1
Coupon Rate
8.70%
Price Quote
106.2
Maturity
Face Value
$
7 years
10 years
17.5 years
27 years
21,000,000
37,000,000
42,000,000
57,000,000
234
6.70
8.40
8.90
94.2
105.0
94.8
If the corporate tax rate is 22 percent, what is the aftertax cost of the company's debt?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
Aftertax cost of debt
5.14 %
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