Question

In: Finance

Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed...

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 35 percent, what is the aftertax cost of Ying's debt? (Do not round your intermediate calculations.)

  

Bond

Coupon Rate

Price Quote

Maturity

Face Value

1 5.8%      105      5 years        $ 19,000,000   
2 6.4         115      9 years        45,000,000   
3 5.8         108      19 years        47,000,000   
4 6.7         119      31 years        58,000,000   

A.3.24%

B.4.98%

C.3.4%

D.3.11%

E.3.08%

Solutions

Expert Solution

Market value has been calculated by multiplying Face value by the Price Quote percentage.

YTM(calculated separately) is as follows:


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