Question
Matlock, Inc., has a bond outstanding with a coupon rate of 6.4 percent and semiannual payments. The bond currently sells for $1,940 and matures in
Matlock, Inc., has a bond outstanding with a coupon rate of 6.4 percent and semiannual payments. The bond currently sells for $1,940 and matures in 20 years. The par value is $2,000. What is the company's pretax cost of debt? [Caution: Par value is $2,000] [Hint: Int pmt: Coupon rate * Par value] [Hint 2: Int pmt is semiannual]
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
Concise 6th Edition
324664559, 978-0324664553
