Business, 03.12.2019 02:31 nrudd9799

Drogo, inc., is trying to determine its cost of debt. the firm has a debt issue outstanding with 12 years to maturity that is quoted at 110 percent of face value. the issue makes semiannual payments and has an embedded cost of 6 percent annually.
a. what is the company’s pretax cost of debt? (do not round intermediate calculations. enter your answer as a percent rounded to 2 decimal places, e. g., 32.16.)
pretax cost of debt %.
b. if the tax rate is 35 percent, what is the aftertax cost of debt? (do not round intermediate calculations. enter your answer as a percent rounded to 2 decimal places, e. g., 32.16.)
aftertax cost of debt %.

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Drogo, inc., is trying to determine its cost of debt. the firm has a debt issue outstanding with 12...

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