ICU Window, Inc., is trying to determine its cost of debt. The firm has a debt i
ID: 2717399 • Letter: I
Question
ICU Window, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with nine years to maturity that is quoted at 113 percent of face value. The issue makes semiannual payments and has an embedded cost of 9.4 percent annually.
What is ICU’s pretax cost of debt? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)
If the tax rate is 38 percent, what is the aftertax cost of debt? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)
Requirement 1:What is ICU’s pretax cost of debt? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)
Explanation / Answer
ICU Window, Inc., is trying to determine its cost of debt. The firm has a debt i