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how was the payment calculated as 60? Cost of Debt DA 15-year, 12% semiannual coupon bond sells for $1,153.72 (par value $1.000). What is the
how was the payment calculated as 60?
Cost of Debt DA 15-year, 12% semiannual coupon bond sells for $1,153.72 (par value $1.000). What is the cost of debt (ra)? F (-1,153.72 PV, 0 PM], 1.000 FV, 30 N. I/YR) = 5% Remember the bond pays a semiannual coupon, so ra = 5% x 2 = 10% Therefore, if marginal tax rate is 40%, after-tax cost of debt will be ra (1 - T) = 10%(1 -0.4) = 6% Pause clip Step by Step Solution
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