Question: a and b please. if not guide me on how to answer Avicorp has a $13.5 milion debt issue outstanding with a 5.0 coupon rate.
Avicorp has a $13.5 milion debt issue outstanding with a 5.0 coupon rate. The debt has semi-annual coupons, the next coupon is due in six months, and the debt matures in five years. It is currently priced at 93% of par value 3. What is Avkcorp's pre-tax cost of debt? None Compute the effective annual retum b. If Avicorp faces a 40% tax rate what is its after-tax cost of debt? Note: Assume that the few ways be able to test interest tax shield a. The cout of this per year. (Round to four decimal places)
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