Sony Bond
|
Par value ? $1000
|
Coupon interest rate
6.5?%
|
Corporate tax rate
35?%
|
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.
a. The before-tax cost of the Sony bond using the? bond's yield to maturity? (YTM) is ___ ?%.
?(Round to two decimal? places.)