XYZ Company has bonds outstanding with 7 years left before maturity. The bonds are currently selling for 800 per 1,000 face value bond. The interest is paid annually at a rate of 12 percent. The firm’s tax rate is 40 percent. Calculate the after-tax cost of debt.
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- A company issued bonds with a $100,000 face value, a 5-year term, a stated rate of 6%, and a market rate of 7%. Interest is paid annually. What is the amount of interest the bondholders will receive at the end of the year?C. XY Ltd has bonds outstanding with 7 years left before maturity. The bonds are currently selling for K800 per K1,000 face value bond. The interest is paid annually at a rate of 12 percent. The firm's tax rate is 40 percent. Calculate the after-tax cost of debt.XYZ's Electrical has a bond issue outstanding with ten years to maturity. These bonds have a $1,000 face value, a 6 percent coupon, and pay interest semi-annually. The bonds are currently quoted at 96 percent of face value. What is XYZ's approximate pre-tax cost of debt?
- The following is the information on debt issued by Huntington Power Co. Calculate the after-tax cost of debt for the firm. Debt: 4 percent coupon paid semiannually, $1,000 par value, 15 years to maturity, current market price of the bond is $889.0. Tax rate is 20%.Jiminiys cricket farm issued a 30 year.8 percent semiannual bond 3 years ago.the bond currently sells for 93 percent of it’s face value. The company’s tax rate is 35 percent. What is the pretax cost of debt?The company has a P1,000 par value bond outstanding with 25 years to maturity. The bond carries an annual interest payment of P88 and is currently selling for P925. The company is in a 30% tax bracket. Compute for the approximate after tax-cost of debt.
- CC Company's 5-year bonds are selling at P820. The bonds face amount is P1,000 and pays an annual interest rate of 6%. CC's tax rate is at 30%. What is CC's cost of debt? Topic: Cost of CapitalSMC will be issuing bonds with a face value of P100,000 through an underwriter. The underwriter will be issuing the bonds at 106 but will charge 7% on face amount. The bonds will be irredeemable and will pay 8% annually. If the tax rate is 25%, what is the effective cost of the bonds?Ratu Ltd is planning to issue bonds with 4 years to maturity and a face value of $100. The coupon rate of the bonds is 6.5% and coupons are paid annually. Ratu expects the net proceeds from each bond issued to be $95. Given the tax rate is 30%, determine the before- and after-tax cost of debt using either the trial and error method or by calculating the IRR.
- Jones Cricket Institute issued a 30 year, 8 percent semi-annual bond 3 year ago. The bond currently sells for 93 percent of its face value. The Company’s tax rate is 35%. What is your best estimate of the after-tax cost of debt now?Sony bonds were issued 8 years ago with a coupon rate of 9%. The bond has 2 years left to maturity and is currently selling for $880. The firm typically falls under a 40% tax rate. Based on this informaiton, what is their after-tax cost of debt? Assume coupon payments are made semiannually.Tetra Inc. has 5% coupon bonds outstanding that have a remaining maturity of 9 years. These bonds pay interest semiannually and have a $1000 face value. Currently, these bonds are selling for $940. Tetra Inc. faces a marginal tax rate of 40%. Estimate Tetra's pre-tax cost of debt.