(Answered) Avicorp has a 139 million debt issue outstanding with a 59

Economics

Avicorp has a $13.9 million debt issue? outstanding, with a 5.9% coupon rate. The debt has semi-annual coupons, the next coupon is due in six months, and the debt matures in five years. It is currently priced at 93% of par value.

A) What is Avicorp's pre-tax cost of debt? Note: Compute the EAR

B) If Avicorp faces a 40% tax rate, what is its after-tax cost of debt?

40% tax? rate, what is its? after-tax cost of? debt?

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Business Economics, Economics

Category:- Business Economics
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