Question
A $100 par value bond with a market price of $97 and a coupon interest rate of 10%. Costs for a new issue would be
A $100 par value bond with a market price of $97 and a coupon interest rate of 10%. Costs for a new issue would be approximately 5%. The bonds mature in ten years and the corporate tax rate is 30%. Estimate the cost of debt before tax.
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Finance Applications And Theory
Authors: Marcia Cornett, Troy Adair, John Nofsinger
6th Edition
1264101589, 9781264101580
