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husky Enterprises recently sold an issue of 11 year maturity bonds. The bonds were sold at a deep discount price of $475 each. After flotation
husky Enterprises recently sold an issue of 11 year maturity bonds. The bonds were sold at a deep discount price of $475 each. After flotation cost, husky received $455.12 each. The bonds have a $1000 maturity value and pay $40 interest at the end of each year. Compute the after-tax cost of debt for these bonds if huskies marginal rate is 40%.
Present Value of an Annuity Interest Factor (PVTFA) (\$1 per period at ho per period for n periods): PVIFA=i1(1+1)x1;PVAN6=PMT(PVFPAi=e) Present Value Interest Factor (PVIF) i\$1 at i% per period for n periods): PVIF=(1+i)21,PV0=Pn(PFi,n) Step by Step Solution
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