Question

The current selling price for δelta Corp.'s $2,000, 6.1% bonds is $1,933. The bonds mature in...

The current selling price for δelta Corp.'s $2,000, 6.1% bonds is $1,933. The bonds mature in 19 years and have semiannual payments. If  δelta Corp. faces an income tax rate of 35%,  what is the δelta Corp.'s aftertax cost of debt?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Mouse, Inc.’s outstanding bonds have a $1,000 par value, and they mature in 5 years. Their...
Mouse, Inc.’s outstanding bonds have a $1,000 par value, and they mature in 5 years. Their yield to maturity in 9%, based on semiannual payments, and the current market price is $853.61. What is the bond’s annual coupon rate?
KD Corp. issued 7.6% semiannual-pay coupon bonds five years ago at par value. The bonds mature...
KD Corp. issued 7.6% semiannual-pay coupon bonds five years ago at par value. The bonds mature 10 years from today and are currently selling at $1,103.19. The beta for the KD Corp. common stock is 1.2. The firm has a target capital structure of 30% debt and 70% equity, but the actual weights reported on the firm's balance sheet are 45% debt and 55% equity. KD Corp has a 21% marginal tax rate. Assume the risk-free rate is 3% and...
ABC Corp. issued 8-year bonds a year ago. The bonds make semiannual payments. The YTM (yield...
ABC Corp. issued 8-year bonds a year ago. The bonds make semiannual payments. The YTM (yield to maturity) on the bonds when issued at par was 8%. ABC issued 12,561 bonds and will face a total repayment of $26,126,880 when the bonds mature. If the YTM on these bonds is 6.1%, what is the current bond price?
GNAT bonds are selling at $1,200. The bonds carry a coupon interest rate of 6.1 percent...
GNAT bonds are selling at $1,200. The bonds carry a coupon interest rate of 6.1 percent and mature in 9 years. What is the expected rate of return? Use your answer in a sentence. Given long-term interest rates are at 3.75 percent, is the bond worth purchasing? Why?
Dinklage Corp. has 5 million shares of common stock outstanding. The current share price is $84,...
Dinklage Corp. has 5 million shares of common stock outstanding. The current share price is $84, and the book value per share is $7. The company also has two bond issues outstanding. The first bond issue has a face value of $60 million, has a 7 percent coupon, and sells for 94 percent of par. The second issue has a face value of $35 million, has a 8 percent coupon, and sells for 107 percent of par. The first issue...
A firm has outstanding bond that mature in 15 years. The bonds have a face value...
A firm has outstanding bond that mature in 15 years. The bonds have a face value of $1000, and a coupon rate of 5.2 percent The bonds make semiannual coupon payments. If the market yield on these bonds is 4.2 percent, what is the current bond price? (Round your answer to 2 decimal places. (e.g., 1032.16))
XYZ company bonds are selling in the market for $1045 (104.50).These bonds will mature in 15...
XYZ company bonds are selling in the market for $1045 (104.50).These bonds will mature in 15 years and pay $70 in interest annually.if the bonds are purchased at the market price, what is the (a)coupon rate ,(b) current yield, (c) approximate yield to maturity and (d) capital gains yield?
Ivanhoe Industries has 8 percent coupon bonds outstanding. These bonds have a market price of $963.32,...
Ivanhoe Industries has 8 percent coupon bonds outstanding. These bonds have a market price of $963.32, pay interest semiannually, and will mature in 6 years. If the tax rate is 35 percent, what are the pre-tax cost and after-tax cost of this debt? (Round answers to 2 decimal places, e.g. 52.75%.) Pre-Tax Cost = ?% After-Tax Cost = ?%
O'Brien Ltd.'s outstanding bonds have a $1,000 par value, and they mature in 25 years. Their...
O'Brien Ltd.'s outstanding bonds have a $1,000 par value, and they mature in 25 years. Their nominal annual, not semiannual yield to maturity is 9.25%, they pay interest semiannually, and they sell at a price of $700. What is the bond's nominal coupon interest rate?
O'Brien Ltd.'s outstanding bonds have a $1,000 par value, and they mature in 25 years. Their...
O'Brien Ltd.'s outstanding bonds have a $1,000 par value, and they mature in 25 years. Their nominal annual, not semiannual yield to maturity is 9.25%, they pay interest semiannually, and they sell at a price of $1,025. What is the bond's nominal coupon interest rate?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT