What is asbury after tax cost of debt


Solve the below problem:

Q: Asbury Corp. Issued 30 year bonds 11 years ago with a coupon rate of 9.5%. Those bonds are now selling to yield 7%. The firm also issued some 20 year bonds 2 years ago with an 8% coupon rate. The two bond issues are rated equally by Standard and Poor's and Moody's. Asbury's marginal tax rate is 38%.

a) What is Asbury's after tax cost of debt?

b) What is the current selling price of the 20 year bonds?

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