Question: Answer is provided, but I don't understand how we get the values for YTM (semi annual). please show all steps and calculations so I can


Answer is provided, but I don't understand how we get the values for YTM (semi annual). please show all steps and calculations so I can understand. thank you
Calculating the Cost of Debt (LO2) Cote Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. If the corporate tax rate is 34 percent, what is the after-tax cost of the company's debt? Bond Coupon Rate Price Quote Maturity Face Value 1 6.00% 103.18 $45,000,000 2 7.50 110.50 40,000,000 3 7.20 104.85 50,000,000 6.80 102.75 65,000,000 5 years 8 years 15 years 25 years Bond After Coupon Rate Price Quote Maturity Face Value Market Value YTM (Semi annual) YTM (Annual 1 2 6.0096 7.50% 103.18 110.5 5 years 8 years 2.63% 2.9296 5.2794 5.84% cost (3496) 3.48% 3.85% 3 7.2096 109.85 $45,000,000 $46,431,000 40,000,000 S44 200,000 50.000.000 $54,925.000 65,000,000 566,787,500 15.3 years 4 6.8096 102.75 25 years 3.109 3.2996 6.20% 6.579 4.0996 4.34% Average after tax cost of debt 3.94% Calculating the Cost of Debt (LO2) Cote Import has several bond issues outstanding, each making semiannual interest payments. The bonds are listed in the following table. If the corporate tax rate is 34 percent, what is the after-tax cost of the company's debt? Bond Coupon Rate Price Quote Maturity Face Value 1 6.00% 103.18 $45,000,000 2 7.50 110.50 40,000,000 3 7.20 104.85 50,000,000 6.80 102.75 65,000,000 5 years 8 years 15 years 25 years Bond After Coupon Rate Price Quote Maturity Face Value Market Value YTM (Semi annual) YTM (Annual 1 2 6.0096 7.50% 103.18 110.5 5 years 8 years 2.63% 2.9296 5.2794 5.84% cost (3496) 3.48% 3.85% 3 7.2096 109.85 $45,000,000 $46,431,000 40,000,000 S44 200,000 50.000.000 $54,925.000 65,000,000 566,787,500 15.3 years 4 6.8096 102.75 25 years 3.109 3.2996 6.20% 6.579 4.0996 4.34% Average after tax cost of debt 3.94%
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
