Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. please help with a and b avicorp has a $13.1 mil

Please help with a and b Avicorp has a $13.1 million debt issue...

50.1K

Verified Solution

Question

Finance

Please help with a and b

image

Avicorp has a $13.1 million debt issue outstanding, with a 5.9% coupon rate. The debt has semi-annual coupons, the next coupon is due in six months, and the debt matures in five years. It is currently priced at 95% of par value. a. What is Avicorp's pre-tax cost of debt? Note: Compute the effective annual return. b. If Avicorp faces a 40% tax rate, what is its after-tax cost of debt? Note: Assume that the firm will always be able to utilize its full interest tax shield. a. The cost of debt is % per year. (Round to four decimal places.)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Basic Math
1.2K views

Let 8 6 be a point on the terminal side of 0 Find the exact...

Chemistry
1.2K views

iron nail and copper (II) sulfate the compound contains Fe2+ molecular equation ionic equation net ionic equation spectator ions

Medical Sciences
1.2K views

Discuss the body’s short- and long-term responses to “stress”. Please be sure to include how these...

Biology
1.2K views

I need new and unique answers, please. (Use your own words, don't copy and paste), Please Use...

Physics
1.2K views

In given meter bridge circuit length of wire AB is 1m When resistance X is...

Geometry
1.2K views

In triangle ABC ZA is a right angle and mZB 45 Find BC If your...

Basic Math
1.2K views

A machine is made up of 3 components: an upper part, a middle part, and...

Calculus
1.2K views

A medical equipment industry manufactures X ray machines The unit cost C the cost in...

Accounting
1.2K views

Agregue un campo calculado llamado AccountTime que calcule la cantidad de das que las cuentas...

Accounting
1.2K views

T. Boone Pickens football stadium at Oklahoma State University has a seating capacity of about...

Accounting
1.2K views

Which 2 team user roles have permission to view and search for apps using the...

Finance
1.2K views

Consider the following information about three stocks: Rate of Return If State Occurs State of...