What is olympic after tax-tax cost of debt

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Reference no: EM131831555

Olympic sports has two issues of debt outstanding. one is a 6% coupon bond with a face value of $35 million, a maturity of 10 years, and a yield to maturity of 7%. The coupons are paid annually. The other bond issue has a maturity of 15 years, with coupons also paid annually, a coupon rate of 7%. The face value of the issue is $40 million, and the issue sells for 94% of par value. The firm's tax rate is 40%.

What is the before-tax cost of debt for Olympic?

What is Olympic's after tax-tax cost of debt?

Reference no: EM131831555

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