C$19$

A

B

C

D

E

F

G

Problem $14\mathrm{.}1$: The Holmes Company is issuing a $$1,000$ par value bond that pays $5$ percent annual coupon interest and matures in $15$ years. Investors are willing to pay $$925$ for the bond, and Holmes faces a tax rate of $28$ percent. What is Holmes' after$-$tax cost of debt on the bond where

coupon interest is paid semiannually?Use excel and excel formulas to solve

$\backslash$table$[[$Coupon Rate,$],[$Years$,],[,],[$Par Value,$],[$PMT$,],[$NPER$,],[$M$,],[$Price $($PV$),],[,],[$YTM $($Semi Annual$),],[$YTM $($Annual$),],[$Tax Rate,$],[$After Tax Cost of Debt,$]]$

Hint: use the yield to maturity calculation from chapter $9$

Hint: see page $453$ for calculation after$-$tax cost of debt