Avicorp has a $13.3 milion de toute outstanding, with a 61% coupon rate. The debt...
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Avicorp has a $13.3 milion de toute outstanding, with a 61% coupon rate. The debt has semiannual coupons, the next coupon e due in six months and the debt matures in five years. It el conenty a. What is Avicorp's pre-tax cost of debt? Note Compute the effective annual retum b. If Avicorp faces a 40% tax rate, what is its after tax cost of debt? Note Assume that the firm willways be to its full interest tax thield a. The cost of cotto % per year. (Round to four decimal places.) b. Il Amicorp faces a 40% tax rate, the ather-tax cost of debt is (Round to four decimal places
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