13. Cost of Debt. A financial analyst at Dawn Chemical notes that the firm's total interest payments

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13. Cost of Debt. A financial analyst at Dawn Chemical notes that the firm's total interest payments this year were $10 million while total debt outstanding was $80 million, and he concludes that the cost of debt was 12.5%. What is wrong with this conclusion? (LO2)

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Fundamentals Of Corporate Finance

ISBN: 9780073382302

6th Edition

Authors: Richard A Brealey, Stewart C Myers, Alan J Marcus

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