Problemavicorp has a 128 million debt issue outstanding, Ask an Expert

Finance

Problem:

Avicorp has a 12.8 million debt issue outstanding with 5.9% coupon rate. The debt has semi anual coupons,the next coupon is due in six months, and the debt matures in five years and it is currently priced at 93%of par value.

Required:

Question 1: What is avicorps pre tax cost of debt?

Question 2: If avicorp faces 40% tax rate what is its afer tax cost of debt?

Note: Please provide through step by step calculations.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91162606

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