Find the cost of debt ?(r?d), and the? after-tax cost of debt for each of the following? bonds: Bond Par...

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Finance

Find the cost of debt
?(r?d),
and the? after-tax cost of debt for each of the following?bonds:
Bond
Par Value
Coupon Rate
Maturity
Current Value
Tax Rate
A
?1,000
?10%
30 Years
?1,455
?40%
B
?1,000
?12%
13 Years
??954
?35%
C
?1,000
?8%
5 Years
??875
?45%
Bond? A, Cost of Debt? (rd) :
Bond A, After Tax Cost of? Debt:
?
Bond? B, Cost of Debt? (rd):
Bond? B, After Tax Cost of? Debt:
?Bond? C, Cost of Debt? (rd):
Bond? C, After Tax Cost of? Debt:
?

Answer & Explanation Solved by verified expert

3.8 Ratings (352 Votes)

AInformation provided Par value future value 1000 Coupon rate 10 Coupon payment 0101000 100 Time 30 years Current price present value 1455 Tax rate 40 The cost of debt is calculated by computing the yield to maturity Enter the below in a financial calculator to compute the yield See Answer

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Find the cost of debt?(r?d),and the? after-tax cost of debt for each of the following?bonds:Bond Par ValueCoupon RateMaturityCurrent ValueTax RateA?1,000?10%30 Years?1,455?40%B?1,000?12%13 Years??954?35%C?1,000?8%5 Years??875?45%Bond? A, Cost of Debt? (rd) :Bond A, After Tax Cost of? Debt:?Bond? B, Cost of Debt? (rd):Bond? B, After Tax Cost of? Debt:?Bond? C, Cost of Debt? (rd):Bond? C, After Tax Cost of? Debt:?

Bond	Par Value	Coupon Rate	Maturity	Current Value	Tax Rate

A	?1,000	?10%	30 Years	?1,455	?40%
B	?1,000	?12%	13 Years	??954	?35%
C	?1,000	?8%	5 Years	??875	?45%