Question: Intro Simple Corp. has one bond issue oustanding, with a maturity of 10.5 years, a coupon rate of 3.4% and a yield to maturity of

Intro

Simple Corp. has one bond issue oustanding, with a maturity of 10.5 years, a coupon rate of 3.4% and a yield to maturity of 4.6%.

Simple Corp.'s average tax rate is 18% and its marginal tax rate is 31%.

Attempt 1/5 for 10 pts.

Part 1

What is the (pre-tax) cost of debt?

Submit

Attempt 1/5 for 10 pts.

Part 2

What is the after-tax cost of debt?

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