Question
Debt capital is provided by a single issue of bonds (20-year, $1,000 par value, $82.50 annual coupon) currently trading at $875. Over the years, shareholders
Debt capital is provided by a single issue of bonds (20-year, $1,000 par value, $82.50 annual coupon) currently trading at $875. Over the years, shareholders have come to expect a 10% return. Their corporate tax rate is 25%.
What is the cost of debt?
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Bond Markets Analysis And Strategies
Authors: Frank J. Fabozzi, Francesco A. Fabozzi
10th Edition
026204627X, 978-0253337535
