At the present time, Andalusian Limited (AL) has 5-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,438.04 per bond, carry a coupon rate of 14%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 35%. If AL wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)? (Note: Round your YTM rate to two decimal place.)

In a fixed-term, level-payment reverse mortgage, sometimes called a reverse annuity mortgage, or ram, a lender agrees to pay the homeowner a monthly payment, or annuity, and expects to be repaid from the homeowner’s equity when he or she sells the home or obtains other financing to pay off the ram. consider a household that owns a $150,000 home free and clear of mortgage debt. the ram lender agrees to a $100,000 ram for 10 years at 6 percent. assume payments are made annually, at the beginning of each year to the homeowner. calculate the annual payment on the ram.