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Lets suppose that Pinterest has 1 series of bonds outstanding with a coupon rate of 7.5%, a par value of $1000, 10 years to maturity,
Lets suppose that Pinterest has 1 series of bonds outstanding with a coupon rate of 7.5%, a par value of $1000, 10 years to maturity, a current market value of $975.50 and pays coupons on a semi-annual basis at the end of the period. Using this information, determine your estimate of the before-tax cost of debt Pinterest would incur if it were to issue new bonds today. Note: You do not need to take into consideration the impact of taxes at this point. A. 3.93% B. 4.28% C. 7.86% D. 8.56%
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