Waller, Inc., is trying to determine cost of debt. The firm has a debt issue outstanding with 16 years to maturity that is quoted at 104 percent of face value.
The issue makes semiannual payments and has a stated coupon rate of 7 percent. What is the company's pretax cost of debt? AND If the tax rate is 33 percent, what is the after-tax of debt? Can I use the BAII Plus calculator to figure this problem?