Jiminy's Cricket Farm issued a bond with 15 years to maturity and a semiannual coupon rate of 5 percent 3 years ago. The bond currently sells for 92 percent of its face value. The company's tax rate is 22 percent. A. What is the pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e. G., 32.16.) b. What is the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e. G., 32.16.)

Pretax cost of debt is 5.94%

After tax cost of debt is 4.63%

Step-by-step explanation:

The pretax cost of the debt is the yield to maturity on the debt issuance,which can be computed using the rate formula in excel:

=rate(nper,pmt,-pv,fv)

nper  is the number of semi-annual interest payments payable by the bond from year 3 onward ,that is the number of years to maturity 12*2=24

pmt is the semi-annual interest payable by the bond issuer which is face value of the bond ,$1000*5%/2=$25

pv is the current  price of the bond which 92% of face value i.e 92%*$1000=$920

fv is the face value of the bond at $1000

=rate(24,25,-920,1000)

rate=2.97%

the rate calculated is a semi-annual rate,annual rate =2.97%*2

                                                                                        =5.94%

The pretax cost of debt is  5.94%

After tax cost of debt=pretax cost of debt*(1-t)

t is the tax rate of 22%

after tax cost  of debt =5.94%*(1-22%)

                                    =4.63%

a.   we have two

lines:   y = 4-x   and  

y = 8-x^-1

given two simultaneous equations that are both to be

true, then the solution is the points where the lines cross. the intersection is

where the two equations are equal. therefore the solution that works for both

equations is when

4-x = 8-x^-1

this is where the two lines will cross and that is the

common point that satisfies both equations.

b.   4-x = 8-x^-1

  x           4-x       8-x^-1

-3           7        

8.33

-2           6         8.5

-1           5         9

  0           4        

-

  1           3        

7

  2           2        

7.5

  3           1         7.67

the table shows that none of the x values from -3 to 3 is

the solution because in no case does

4-x = 8-x^-1

to find the solution we need to rearrange the equation to

find for x:

4-x = 8-x^-1

multiply both sides with x:

4x-x^2 = 8x-1

x^2+4x-1=0

x= -4.236, 0.236

therefore there are two points that satisfies the

equation.

find y:  

x=-4.236

y = 4-x   = 4 – (-4.236)

= 8.236

y = 8-x^-1 =   .236)^-1

= 8.236

x=0.236

  y = 4-x   = 4 – (0.236) = 3.764

y = 8-x^-1 =   8-(0.236)^-1

= 3.764

thus the two lines cross at 2 points:

(-4.236, 8.236) & (0.236, 3.764)

c.   to solve

graphically the equation 4-x = 8-x^-1

we would graph both lines: y = 4-x   and   y

= 8-x^-1

the point on the graph where the lines cross is the

solution to the system of equations.

just graph the points on part b on a cartesian coordinate

system and extend the two lines.   the

solution is, as stated, the point where the two lines cross on the graph.

step-by-step explanation:

mark brainliest!