?Before-tax cost of debt and? after-tax cost of debt Personal Finance Problem David Abbot is interested in purchasing a bond issued by Sony. He has obtained the following information on the? security: Sony Bond Par value ? $1000 Coupon interest rate 8.0?% Corporate tax rate 25?% Cost $900 Years to maturity 10.
Answer the following? questions:
a. Calculate the ?before-tax cost of the Sony bond using the? bond's yield to maturity? (YTM).
b. Calculate the ?after-tax cost of the Sony bond given the corporate tax rate.