Just answer #2,3,4 and 6. All answers that are rates must be written in percent, rounded off to five decimal places.

Topic Covered: Long-term Financing Decisions (Cost of Debt and Preferred Shares)

Problem 2: Straight Bonds ABC Corporation plans to issue an 8%, 15-year, P5,000,000 face value bonds. It will incur P300,000 as underwriting fee. What is the cost of the bond based on the following methods? 2. Interpolation method using the range 5% to 10% 3. Interpolation method using the range 8% to 10% 4. Interpolation method using the range 8% to 9% 5. Yield-to-maturity formula 6. Trial and error method (closest percent, 5 decimal places)