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Ap A bond that has SAR 1,000 par value (face value) and a contract or coupon interest rate of 9 percent. A new issue would
Ap A bond that has SAR 1,000 par value (face value) and a contract or coupon interest rate of 9 percent. A new issue would have a flotation cost of l1 percent of the S1,150 market value. The bonds mature in 20 years. The firm's marginal tax rate is 35 percent. DATA face value coupon interest rate flotation cost mrkt value years marginal tax rate Net price = Cost (interest) - After-Tax cost 1,000.00 9.0% 11.0%
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