What is coval consulting after-tax cost of debt in yen

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Reference no: EM131562833

The dollar cost of debt for Coval Consulting, a U.S. research firm, is 7.4%. The firm faces a tax rate of 40% on all income, no matter where it is earned. Managers in the firm need to know its yen costof debt because they are considering a new bond issue in Tokyo to raise money for a new investment there. The risk-free rates on dollars and yen are r$ = 4% and rYen = 1.3% respectively. Coval Consulting is willing to assume that capital markets are internationally integrated and that its freecash flows are uncorrelated with the yen-dollar spot rate. What is Coval Consulting's after-tax cost of debt in yen?

The after-tax cost of debt in dollars is __%. (Round to two decimal places.)

The cost of equity is __ %. (Round to two decimal places.)

Reference no: EM131562833

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