Calculating the Cost of Debt for Ying

Ying Import has several bond issuances outstanding, each making semiannual interest payments. The bonds are listed in table attached. If the corporate tax rate is 34%, what is the aftertax cost of Ying's debt?

Coupon Price Face
Bond Rate Quote Maturity Value
1 8.00% $106.38 5 years 10,000,000
2 7.50% $98.00 8 years 45,000,000
3 6.40% $82.00 15 ½ years 35,000,000
4 9.75% $101.50 25 years 45,000,000

See data on attached spreadsheet

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...7.50% $98.00 8 years 45,000,000 450000 $44,100,000 0.341561268 8% 2.73%
3 6.40% $82.00 15 ½ years 35,000,000 350000 $28,700,000 0.222285905 8.50% 1.89%
4 9.75% $101.50 25 years 45,000,000 450000 $45,675,000 0.353759885 9.50% 3.36%
Total $129,113,000 1 8.52%

To calculate the cost of debt the market value has to be equated with ...