15 4 years ago Mickey's Mouse Emporium issued a bond with 30 years to maturity. The...

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15 4 years ago Mickey's Mouse Emporium issued a bond with 30 years to maturity. The bond pays an annual coupon of 6 percent. The bond currently sells for 95 percent of its face value and has a yield to maturity of 6.40%. The company's tax rate is 40 percent. The book value of the debt issue is $45 million. 42 45000000 In addition, Mickey's Mouse Emporium issued a zero coupon bond that yields 4.15% with 15 years left to maturity; the book value of this bond issue is $50 million, and the bonds sell for 54 percent of par. What is the company's (after-tax) cost of debt based on the debts' market value? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) 15 4 years ago Mickey's Mouse Emporium issued a bond with 30 years to maturity. The bond pays an annual coupon of 6 percent. The bond currently sells for 95 percent of its face value and has a yield to maturity of 6.40%. The company's tax rate is 40 percent. The book value of the debt issue is $45 million. 42 45000000 In addition, Mickey's Mouse Emporium issued a zero coupon bond that yields 4.15% with 15 years left to maturity; the book value of this bond issue is $50 million, and the bonds sell for 54 percent of par. What is the company's (after-tax) cost of debt based on the debts' market value? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Answer rating: 100% (QA)

Aftertax cost of debt based on market value Step 1 Calculate the aftertax cost of the first bond Pre... View the full answer