Olympic Sports has two issues of debt outstanding. One is a 9% coupon bond with a face value of $20 million, a maturity of 10 years, and a yield to maturity of 10%. The coupons are paid annually. The other bond issue has a maturity of 15 years, with coupons also paid annually, and a coupon rate of 10%. The face value of the issue is $25 million, and the issue sells for 94% of par value. The firm's tax rate is 21%. What is the before-tax cost of debt for Olympic? What is Olympic's after-tax cost of debt?

Peng Corporation has 100 bonds outstanding with a maturity value of $1,000. The required rate of return on these bonds is currently 10%, and interest is paid semiannually. The bonds mature in five years, and their current market value is $768 per bond. The annual coupon interest rate is 8.12% 6.44% 3.99% 2.64%

ZYX Company has two different bonds currently outstanding. Bond X has a face value of $200 000 and matures in 10 years' time. The coupon rate on the bond is 10%. Coupons are paid semi-annually in arrears. Bond Y also has a face value of $200 000 and a maturity of 10 years; it makes no coupon payments over its 10-year life. The yield to maturity (YTM) on both bonds is 12% per year, compounded semi-annually. What is the maximum amount that a rational investor would pay for each of these bonds? Round off your answers to two decimal places. Which of the two bonds should the rational investor invest in, if market interest rates are expected to rise?

Olympic Sports has two issues of debt outstanding. One is a 7% coupon bond with a face value of $30 million, a maturity of 15 years, and a yield to maturity of 8%. The coupons are paid annually. The other bond issue has a maturity of 20 years, with coupons also paid annually, and a coupon rate of 8%. The face value of the issue is $35 million, and the issue sells for 94% of par value. The firm's tax rate is 30%.   a. What is the before-tax cost of debt for Olympic? b. What is Olympic's after-tax cost of debt?