Mudvayne is trying to determine its cost of debt. The firm has a debt issue...
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Mudvayne is trying to determine its cost of debt. The firm has a debt issue outstanding with 18 years to maturity that is quoted at 107% of face value. The issue makes semiannual payments and has an embedded cost of 6% annually. What is the company's pretax cost of debt? If the tax rate is 35%, what is after tax cost of debt?
Settlement: 01/01/00
Marturity: 01/01/18
Price%: 107
Coupon Rate: 6%
Payment per year: 2
Tax Rate: 35%
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