Cote Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following able. Bond 1 2 3 4 Coupon Rate 6.00 % 7.50 7.20 6.80 Price Quote 103.42 110.74 110.09 102.99 Maturity 5 years 8 years % 15.5 years 25 years Face Value $ 45,000,000 40,000,000 50,000,000 65,000,000 the corporate tax rate is 34%, what is the after-tax cost of the company's debt? (Do not round intermediate calculations. Round nal answer to 2 decimal places.) Cost of debt
Cote Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following able. Bond 1 2 3 4 Coupon Rate 6.00 % 7.50 7.20 6.80 Price Quote 103.42 110.74 110.09 102.99 Maturity 5 years 8 years % 15.5 years 25 years Face Value $ 45,000,000 40,000,000 50,000,000 65,000,000 the corporate tax rate is 34%, what is the after-tax cost of the company's debt? (Do not round intermediate calculations. Round nal answer to 2 decimal places.) Cost of debt
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 10.1P
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![Problem 14-24 Calculating the Cost of Debt (LO3)
Cote Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following
table.
Bond
1
2
3
4
Coupon Rate
6.00 %
7.50
7.20
6.80
Price Quote
103.42
110.74
110.09
102.99
Cost of debt
Maturity
5 years
8 years
%
15.5 years
25 years
Face Value
$ 45,000,000
40,000,000
If the corporate tax rate is 34%, what is the after-tax cost of the company's debt? (Do not round intermediate calculations. Round the
final answer to 2 decimal places.)
50,000,000
65,000,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe04ccfe9-7604-4bc9-b951-418c88ba2f05%2Fcdd2207a-d504-46fe-98c9-c717e6a82a23%2Fdc9mywo_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 14-24 Calculating the Cost of Debt (LO3)
Cote Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following
table.
Bond
1
2
3
4
Coupon Rate
6.00 %
7.50
7.20
6.80
Price Quote
103.42
110.74
110.09
102.99
Cost of debt
Maturity
5 years
8 years
%
15.5 years
25 years
Face Value
$ 45,000,000
40,000,000
If the corporate tax rate is 34%, what is the after-tax cost of the company's debt? (Do not round intermediate calculations. Round the
final answer to 2 decimal places.)
50,000,000
65,000,000
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