What is the after tax cost of debt for this firm

Assignment Help Financial Management

Reference no: EM132057270

1. Suppose you are trying to estimate the after tax cost of debt for a firm as part of the calculation of the Weighted Average Cost of Capital (WACC). The corporate tax rate for this firm is 38%. The firm's bonds pay interest semiannually with a 4.9% coupon rate and have a maturity of 9 years. If the annual yield to maturity of the bonds is 6.14%, what is the after tax cost of debt for this firm? (Answer to the nearest hundredth of a percent, e.g. 12.34%, but do not use a percent sign).

2. Suppose you are trying to estimate the after tax cost of debt for a firm as part of the calculation of the Weighted Average Cost of Capital (WACC). The corporate tax rate for this firm is 37%. The firm's bonds pay interest semiannually with a 5.7% coupon rate and have a maturity of 6 years. If the current price of the bonds is $932.56, what is the after tax cost of debt for this firm? (Answer to the nearest tenth of a percent, e.g. 12.3%, but do not use a percent sign).

3. The current stock price for a company is $32 per share, and there are 6 million shares outstanding. This firm also has 60,000 bonds outstanding, which pay interest semiannually. If these bonds have a coupon interest rate of 6%, 18 years to maturity, a face value of $1,000, and a current price of 1,114.8, what is the total market value of this firm? (Answer to the nearest dollar, but do not use a dollar sign).

Reference no: EM132057270

Questions Cloud

Discount rate for expansion of company present business : What is the required rate of return on Okefenokee stock? Estimate the discount rate for an expansion of the company’s present business.

Costs of hedging by forward contracts and option contract : What is the hedged value of Alcoa's receivable using the forward market hedge? Discuss and compare the costs of hedging by forward contracts and option contract

What is the npv of the proposed project for this firm : If the corporate tax rate is 32%, what is the NPV of the proposed project for this firm?

What is the percent market value of equity for this firm : what is the percent market value of equity for this firm? what is the total market value of this firm?

What is the after tax cost of debt for this firm : If the annual yield to maturity of the bonds is 6.14%, what is the after tax cost of debt for this firm?

What is the discounted payback for project : The required rate of return is 14% for projects at this company. What is the discounted payback for this project?

After tax salvage cash flow for this new machine : If the corporate tax rate is 29%, what is the after tax salvage cash flow for this new machine at the end of the project?

Calculate number of futures contracts required to synthesize : Calculate the number of futures contracts required to synthesize the cash, and state whether it will be a long or short position.

What is the financial and accounting break-even point : If the required rate of return is 11% per year, what is the accounting break-even point? what is the financial break-even point?

User Account

All Pages