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# Input Area Settlement 01/01/00 Maturity 01/01/17 Price (% of par) 110 Coupon rate 6.80% Payments per year 2 Tax rate 40% Output Area: Pretax cost of...

Input Area

Settlement 01/01/00

Maturity 01/01/17

Price (% of par)              110

Coupon rate 6.80%

Payments per year                2

Tax rate 40%

Output Area:

a. Pretax cost of debt

b. Aftertax cost of debt

c. Which is more relevant, the pretax or the after-tax cost of debt and why?

Rate is calculated using the Rate formula of Excel Nper = (17)*2=34 Pv=-110 Fv=100 Pmt =100*6.8%/2=3.4 Type =0 Now... View the full answer

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