Question: Notable Nothings plans to issue new bonds with the same yield as its existing bonds. The existing bonds make semi-annual coupon payments of $28, have

Notable Nothings plans to issue new bonds with the same yield as its existing bonds. The existing bonds make semi-annual coupon payments of $28, have a face value of $1000, have 12 years remaining to maturity, and are currently selling for $918. (P/Yr=2, N=24, PMT=28, FV=1000, PV=-918 Solve for I/Yr = 6.60) Given the Interest Rate (YTM) of 6.60 percent for the existing bonds, if Notable's marginal tax rate is 40%, what is the after-tax cost of debt for Notable?

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