Avicorp has a 135 million debt issue outstanding with a 61, Financial Management

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Avicorp has a 135 million debt issue outstanding with a 61

Avicorp has a $13.5 million debt issue? outstanding, with a 6.1% coupon rate. The debt has? semi-annual coupons, the next coupon is due in six? months, and the debt matures in five years. It is currently priced at 96% of par value.

a. What is? Avicorp's pre-tax cost of? debt? Note: Compute the effective annual return.

b. If Avicorp faces a 40% tax? rate, what is its? after-tax cost of? debt?

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Financial Management: Avicorp has a 135 million debt issue outstanding with a 61

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Financial Management: Avicorp has a 135 million debt issue outstanding with a 61

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