Pearces cricket farm issued a 30-year 7 percent semiannual, Ask an Expert

Finance

Pearce's cricket farm issued a 30-year, 7 percent semiannual bond 3 years ago. The bond currently sells for 93 percent of its face value.

The company's tax rate is 35 percent. assume the par value of the bond is 1000.00

A) What is the pre-tax cost of debt

B) what is the after-tax cost of debt

C) which is more relevent, the pre-tax or the after tax cost of debt? why?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92408624

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