Vijay Problem 14-22 Calculating the Cost of Debt [LO2]Ying Import has several bond issues outstanding, each making semiannual interestpayments. The bonds are listed in the following table.Bond1234CouponRate Price Quote5.2% 104.966.8113.726.7112.27101.516.0Cost of debtMaturity6 years9 years16.5 years26 yearsFace Value$58,000,00053,000,00073,000,00080,000,000If the corporate tax rate is 23 percent, what is the aftertax cost of the company's debt?(Do not round intermediate calculations and enter your answer as a percent roundedto 2 decimal places, e.g., 32.16.)

Variables in the question: BondCoupon ratePrice QuoteMaturity (years)Face Value…

Problem 14-22 Calculating the Cost of Debt [LO2] Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. Bond 1 234 Coupon Rate Price Quote 5.2% 6.8 6.7 6.0 104.96 113.72 112.27 101.51 Cost of debt Maturity 6 years 9 years 16.5 years 26 years % Face Value $ If the corporate tax rate is 23 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.) 58,000,000 53,000,000 73,000,000 80,000,000

Problem 14-22 Calculating the Cost of Debt [LO2] Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. Bond 1 234 Coupon Rate Price Quote 5.2% 6.8 6.7 6.0 104.96 113.72 112.27 101.51 Cost of debt Maturity 6 years 9 years 16.5 years 26 years % Face Value $ If the corporate tax rate is 23 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.) 58,000,000 53,000,000 73,000,000 80,000,000

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Problem 14-24 Calculating the Cost of Debt (LO3) Cote Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. Price Bond Coupon Rate Quote 1 7.00 % 2 8.50 103.38 110.70 Maturity 5 years Face Value $ 45,000,000 3 8.20 8 years 110.05 15.5 years 40,000,000 4 7.80 102.95 25 years 50,000,000 65,000,000 If the corporate tax rate is 34%, what is the after-tax cost of the company's debt? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Cost of debt %
Problem 14-24 Calculating the Cost of Debt (LO3) Cote Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. Bond 1 2 3 4 Coupon Rate 6.00 % 7.50 7.20 6.80 Price Quote 103.42 110.74 110.09 102.99 Cost of debt Maturity 5 years 8 years % 15.5 years 25 years Face Value $ 45,000,000 40,000,000 If the corporate tax rate is 34%, what is the after-tax cost of the company's debt? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) 50,000,000 65,000,000
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QS 14-19A (Algo) Computing bond price C2 Compute the selling price of 10%, 10-year bonds with a par value of $290,000 and semiannual interest payments. The annual market rate for these bonds is 12%. Use present value Table B.1 and Table B.3 in Appendix B. (Round all table values to 4 decimal places, and use the rounded table values in calculations.) Answer is complete but not entirely correct. Cash Flow $290,000 par (maturity) value $14,500 interest payment Price of Bond Table Value 0.3118 11.4699 $ S Present Value 90,442 166,314 256,756
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#3 Cost of debt 3. Cost of debt. Kenny Enterprises has just issued a bond with a par value bf $1,000, a maturity of twenty years, and an 8% coupon rate with semiannual payments. What is the cost of debt for Kenny Enterprises if the bond sells at the following prices? What do you notice about the price and the cost of debt? a. $920 b. $1,000 c. $1,080 d. $1,173

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