Ying import has several bond issues outstanding each making


Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table.

Bond: 1 Coupon Rate: 6.3% Price Quote: 106.16 Maturity: 5 yrs Face Value: 43,000,000

Bond: 2 Coupon Rate: 7.8% Price Quote: 114.82 Maturity: 8 yrs Face Value: 38,000,000

Bond: 3 Coupon Rate: 7.5% Price Quote: 113.37 Maturity: 15.5 yrs Face Value: 58,000,000

Bond: 4 Coupon Rate: 7.1% Price Quote: 102.61 Maturity: 25 yrs Face Value: 53,000,000

If the corporate tax rate is 34 percent, what is the aftertax cost of the company’s debt?

Cost of Debt? %

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Financial Management: Ying import has several bond issues outstanding each making
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