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Business, 25.12.2019 22:31 mtiger

Avicorp has a $10 million debt issue outstanding, with a 6% coupon rate. the debt has semiannual coupons, the next coupon is due in six months, and the debt matures in five years. it is currently priced at 95% of par value.

a. what is avicorp’s pretax cost of debt?
b. if avicorp faces a 40% tax rate, what is its after-tax cost of debt?

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Avicorp has a $10 million debt issue outstanding, with a 6% coupon rate. the debt has semiannual cou...
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