Avicorp has a$ 14.5million debt issue outstanding
Question # 00507039
Posted By:
Updated on: 04/02/2017 02:42 AM Due on: 04/02/2017

Avicorp has a$ 14.5million debt issue outstanding, with a5.8 %coupon rate. The debt has semi-annual coupons, with the next coupon is due in six months. The debt matures in five years. It is currently priced at96 %of par value.
a. What is Avicorp's pre-tax cost of debt? (Round to four decimal places as needed.)
b. If Avicorp faces a 30 % tax rate, what is its after-tax cost of debt?

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Rating:
5/
Solution: Avicorp has a$ 14.5million debt issue outstanding