DuPont reports in a recent balance sheet $598 million of 5.25 percent notes paya

Question

DuPont reports in a recent balance sheet $598 million of 5.25 percent notes payable due in 2016. The company's income tax rate is approximately 19 percent.

a.
Compute the company's after-tax cost of borrowing on this bond issue stated as a total dollar amount. (Enter your answer in millions. Round your intermediate calculations and final answer to 3 decimal places. Omit the "$" sign in your response.)

Annual after-tax cost of borrowing $________??? million

b.
Compute the company's after-tax cost of borrowing on this bond issue stated as a percentage of the amount borrowed. (Round your intermediate calculations to 3 decimal places and final answer to 2 decimal places. Omit the "%" sign in your response.)

Annual after-tax cost of borrowing ________??? %

Explanation / Answer

254.3millions

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