Question
Compute the cost for the following source of financing: a. A $100 par value bond with a market price of $97 and a coupon interest
Compute the cost for the following source of financing:
a. 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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Personal Finance Turning Money into Wealth
Authors: Arthur J. Keown
8th edition
134730364, 978-0134730363
