. 2. Flotation costs and the cost of debt In March of 2020 PepsiCo, Inc. (PEP) sold...
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Flotation costs and the cost of debt In March of 2020 PepsiCo, Inc. (PEP) sold $750 million worth of 40-year 4.25% coupon bonds that pay semi-annual interest. At the time the bonds were issued, the market paid $994.11 per bond and the flotation cost was $18.25 per bond. Pepsi's corporate tax rate is 21%. a. Ignoring flotation costs, what is Pepsi's before-tax and after-tax costs of debt? b. Considering flotation costs, what is Pepsi's before-tax and after-tax costs of debt? C a. Ignoring flotation cost. Pepsi's before-tax cost of debt is%. (Round to two decimal places.) Flotation costs and the cost of debt In March of 2020 PepsiCo, Inc. (PEP) sold $750 million worth of 40-year 4.25% coupon bonds that pay semi-annual interest. At the time the bonds were issued, the market paid $994.11 per bond and the flotation cost was $18.25 per bond. Pepsi's corporate tax rate is 21%. a. Ignoring flotation costs, what is Pepsi's before-tax and after-tax costs of debt? b. Considering flotation costs, what is Pepsi's before-tax and after-tax costs of debt? C a. Ignoring flotation cost. Pepsi's before-tax cost of debt is%. (Round to two decimal places.)
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Related Book For
Thermodynamics An Engineering Approach
ISBN: 978-0073398174
8th edition
Authors: Yunus A. Cengel, Michael A. Boles
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