A security will make payments of $25 per month, plus $1000 at maturity. The price of this security is $2000. Which of the following is true?
If the time to maturity is 7 years then the period rate is 0.84%
If the time to maturity is 4 years then the yield to maturity is 3.34%
If the time to maturity is 7 years then the yield to maturity is 0.84%
If the time to maturity is 4 years then the period rate is 10.05%
If the time to maturity is 4 years then the yield to maturity is 10.05%
Advance, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 14 years to maturity that is quoted at 105 percent of face value. The issue makes semiannual payments and has a coupon rate of 4 percent.
What is the company's 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.)
Pretax cost of debt % If the tax rate is 35 percent, 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.)