Great Lakes Packing has two bond issues outstanding. The first issue has a coupon rate of 3.84 percent, a par value of $1,000 per bond, matures in 7 years, has a total face value of $5.3 million, and is quoted at 102 percent of face value. The second issue has a coupon rate of 6.61 percent, a par value of $1,000 per bond, matures in 16 years, has a total face value of $9.6 million, and is quoted at 105 percent of face value. Both bonds pay interest semiannually. The company's tax rate is 39 percent.
What is the firm's weighted average aftertax cost of debt?

In early january, burger mania acquired 100% of the common stock of the crispy taco restaurant chain. the purchase price allocation included the following items: $4 million, patent; $3 million, trademark considered to have an indefinite useful life; and $5 million, goodwill. burger mania's policy is to amortize intangible assets with finite useful lives using the straight-line method, no residual value, and a five-year service life. what is the total amount of amortization expense that would appear in burger mania's income statement for the first year ended december 31 related to these items?

Rossdale co. stock currently sells for $68.91 per share and has a beta of 0.88. the market risk premium is 7.10 percent and the risk-free rate is 2.91 percent annually. the company just paid a dividend of $3.57 per share, which it has pledged to increase at an annual rate of 3.25 percent indefinitely. what is your best estimate of the company's cost of equity?

Kelso electric is debating between a leveraged and an unleveraged capital structure. the all equity capital structure would consist of 40,000 shares of stock. the debt and equity option would consist of 25,000 shares of stock plus $280,000 of debt with an interest rate of 7 percent. what is the break-even level of earnings before interest and taxes between these two options?