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    velvetmckinley's Avatar
    velvetmckinley Posts: 0, Reputation: 1
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    #1

    Jan 8, 2011, 12:23 PM
    Pretax Cost of Debt Formula
    How do you solve for the pre tax Cost of Debt with the followning info:

    Settlement 12/01/00
    Maturity 12/01/30
    Price (% of par) 7
    Coupon rate 108%
    Payments per year 2
    Tax rate 35%
    kiransoni's Avatar
    kiransoni Posts: 1, Reputation: 1
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    #2

    Dec 23, 2011, 03:16 AM
    answer.1 is np = face value - issue expenses ( at par )
    np = face value - issue expenses - discount ( at discount ) and
    np = face value - issue expenses + premium ( at premimum )
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