Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. Coupon Bond Rate Price Quote Maturity Face Value $ 1 6.4% 106.36 6 years 44,000,000 234 7.9 114.92 9 years 39,000,000 7.6 113.47 16.5 years 59,000,000 7.2 102.71 26 years 66,000,000 If the corporate tax rate is 24 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.) Cost of debt %

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Ying Import has several bond issues outstanding, each making semiannual interest
payments. The bonds are listed in the following table.
Coupon
Bond
Rate Price Quote
Maturity
Face Value
$
1
6.4%
106.36
6 years
44,000,000
234
7.9
114.92
9 years
39,000,000
7.6
113.47
16.5 years
59,000,000
7.2
102.71
26 years
66,000,000
If the corporate tax rate is 24 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.)
Cost of debt
%
Transcribed Image Text:Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. Coupon Bond Rate Price Quote Maturity Face Value $ 1 6.4% 106.36 6 years 44,000,000 234 7.9 114.92 9 years 39,000,000 7.6 113.47 16.5 years 59,000,000 7.2 102.71 26 years 66,000,000 If the corporate tax rate is 24 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.) Cost of debt %
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