The following 2016 information is available for three companies:

Required a. Determine the annual before - tax interest cost for each company in dollars. b. Determine the annual after - tax interest cost for each company in dollars. c. Determine the annual after - tax interest cost for each company as a percentage of the face value of the bonds.

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Face value of bonds payable Interest rate Income tax rate Crow Co. 8% Robin Co. $300,000 $600,000 $500,000 35% 7% Sparrow Co. 20% 6% 25% Face value of bonds payable Interest rate Income tax rate Crow Co. 8% Robin Co. $300,000 $600,000 $500,000 35% 7% Sparrow Co. 20% 6% 25%

Answer rating: 100% (QA)

a Calculate the annual before tax interest cost for ... View the full answer