The after tax cost of Par Value Corporations outstanding bond is 6.6%. If the firm is in

Question:

The after tax cost of Corporation’s outstanding bond is 6.6%. If the firm is in the 34% tax bracket, what is the before tax cost (yield) of that debt?

Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...