Question
For a firm in the 40% tax bracket and $6,500,000 in sales, the debt cost of capital for a 7% bond maturing in 20 years
For a firm in the 40% tax bracket and $6,500,000 in sales, the debt cost of capital for a 7% bond maturing in 20 years with a $1,000 face value and which is currently selling at 94.5, the bonds cost of capital is determined as
74.08%
None of the answers provided is correct
44.45%
4.52%
7.54%
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Fundamentals Of Financial Management
Authors: James Van Horne, John Wachowicz
13th Revised Edition
978-0273713630, 273713639
