Question

Problem 12-22 Calculating the Cost of Debt [LO2]

Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the table below.

Bond	Coupon Rate		Price Quote	Maturity		Face Value
1	8.60	%	106.1	6	years	$	20,000,000
2	6.60		94.3	9	years		38,000,000
3	8.30		104.9	16.5	years		43,000,000
4	8.80		94.7	26	years		58,000,000

If the corporate tax rate is 30 percent, what is the aftertax cost of the company’s debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
  
Aftertax cost of debt             %

Answer 1