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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 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

If the corporate tax rate is 21 percent, what is the aftertax cost of the company’s debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Solutions

Expert Solution

After tax cost of capital:

formula:


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