YING IMPORT HAS SEVERAL BOND ISSUES OUTSTANDING, EACH MAKING SEMIANNUAL INTEREST PAYMENTS. THE BONDS ARE LISTED IN THE TABLE BELOW. BONDCOUPON….
Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the table below. |
Bond | Coupon Rate | Price Quote | Maturity | Face Value |
1 | 8.60% | 106.1 | 6 years | $20,000,000 |
2 | 6.60 | 94.3 | 9 years | 38,000,000 |
3 | 8.30 | 104.9 | 16.5 years | 43,000,000 |
4 | 8.80 | 94.7 | 26 years | 58,000,000 |
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Required: |
If the corporate tax rate is 30 percent, what is the aftertax cost of the company’s debt? |