Rockingham Motors issued a 30-year, 8 percent semiannual bond 3 years ago. The bond currently sells for 103.1 percent of its face value. The company's tax rate is 21 percent. What is the aftertax cost of debt? Multiple Choice O 6.10% 2.72% О О О 5.69% 5.10% 5.99%
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- 3. Calculating Cost of Debt Shanken Corp. issued a 30-year, 5.9 percent semiannual bond three years ago. The bond currently sells for 106 percent of its face value. The company's tax rate is 22 percent. a. What is the pretax cost of debt? b. What is the aftertax cost of debt? c. Which is more relevant, the pretax or the aftertax cost of debt? Why?3. Jones Cricket Institute issued a 30 year, 8 percent semi-annual bond 3 year ago. The bond currently sells for 93 percent of its face value. The Company's tax rate is 35%. a. What is the pre-taxed cost of debt? b. What is the after tax cost of debt? c. Which is more relevant, the pre-tax or the after- tax cost of debt? Why? In question 3 above, suppose the book value of the debt issues is $60 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 10 years to mature. The book value of this issue is $35 million and the bond sell for 57 percent of par. a. What is the company's total book value of debt? b. The total market value? c. What is your best estimate of the after-tax cost of debt now?|Shanken NV issued a 20-year, 12 percent semiannual bond 5 years ago. The bond currently sells for 129 percent of its face value. The company’s tax rate is 35 percent. Assume the face value of the debt is €1,000. What is the after-tax cost of debt? a) 3.844% b) 5.057% c) 8.54% d) 5.55%
- Temple-Midland, Inc. is issuing a $1,000 par value bond that pays 7.5 percent annual interest and matures in 15 years. Investors are willing to pay $949 for the bond and Temple faces a tax rate of 32 percent. What is Temple's after-tax cost of debt on the bond? Question content area bottom Part 1 The after-tax cost of debt is_____%Jiminy's Cricket Farm issued a 30-year, 7 percent semiannual bond 4 years ago. The bond currently sells for 95 percent of its face value. The company's tax rate is 25 percent. a. What is the pretax cost of debt? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the aftertax cost of debt? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Pretax cost of debt b. Aftertax cost of debt % % c. Which is more relevant, the pretax or the aftertax cost of debt? O Aftertax cost of debt O Pretax cost of debtes Jiminy's Cricket Farm issued a 30-year, 5.7 percent semiannual bond 3 years ago. The bond currently sells for 111 percent of its face value. The company's tax rate is 25 percent. a. What is the pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Pretax cost of debt % b. Aftertax cost of debt %
- Jiminy's Cricket Farm issued six years ago a 30-year $1000 face value bond with an 8 percent annual coupon rate that has semiannual payments. The bond currently sells for $1,140. What is the after-tax cost of debt if the company's tax rate is 35 percent? O 4.425% 4.145% 4.955% 5.065%Jones Cricket Institute issued a 30 year, 8 percent semiannual bond 3 years ago. The bond currently sells for 93 percent of its face value. The Company’s tax rate is 35%.a. What is the pre-taxed cost of debt?b. What is the after-tax cost of debt?c. Which is more relevant, the pre-tax or the after-tax cost of debt? Why? In the question above, suppose the book value of the debt issues is $60 million. In addition, the company has a second debt issue on the market, a zero-coupon bond with 10 years to mature. The book value of this issue is $35 million and the bond sells for 57 percent of par. a. What is the company’s total book value of debt?b. The total market value?c. What is your best estimate of the after-tax cost of debt now?Jiminiys cricket farm issued a 30 year.8 percent semiannual bond 3 years ago.the bond currently sells for 93 percent of it’s face value. The company’s tax rate is 35 percent. What is the pretax cost of debt?
- Jones Cricket Institute issued a 30 year, 8 percent semi-annual bond 3 year ago. The bond currently sells for 93 percent of its face value. The Company's tax rate is 35%. a. What is the pre-taxed cost of debt? b. What is the after tax cost of debt? c. Which is more relevant, the pre-tax or the after- tax cost of debt? Why?Jones Cricket Institute issued a 30 year, 8 percent semi-annual bond 3 year ago. The bond currently sells for 93 percent of its face value. The Company’s tax rate is 35%. 1. What is the pre-taxed cost of debt? 2. What is the after tax cost of debt? 3. Which is more relevant, the pre-tax or the after- tax cost of debt? Why?Jones Cricket Institute issued a 30-year, 8 percent semi-annual bond 3 year ago. The bond currently sells for 93 percent of its face value. The Company’s tax rate is 35%. a. What is the pre-taxed cost of debt? b. What is the after-tax cost of debt? c. Which is more relevant, the pre-tax or the after- tax cost of debt? Why? In the question above, suppose the book value of the debt issues is $60 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 10 years to mature. The book value of this issue is $35 million and the bond sell for 57 percent of par. a. What is the company’s total book value of debt? b. The total market value? c. What is your best estimate of the after-tax cost of debt now?