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Tyler corporation issued a 30-year 7 percent semiannual


Question - How to find the pretax and after tax cost of debt?

Tyler Corporation issued a 30-year, 7 percent semiannual bond 7 years ago. The bond currently sells for 94 percent of its face value. The company's tax rate is 35%.

A) What is Tyler Corporation's pretax cost of debt?

B) What is Tyler Corporation's after tax cost of debt?

C) Which is more relevant, the pretax or the after tax cost of debt? Why?

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Accounting Basics: Tyler corporation issued a 30-year 7 percent semiannual
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