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Posted on May 31, 2024

On January 1 year 1, a company issues 7%, 10 year $300,000 par value bonds that pay annual interest on December 31 of every year.

On January 1 year 1, a company issues 7%, 10 year $300,000 par value bonds that pay annual interest on December 31 of every year. The bonds were issued at 104.

Required: Calculate the total borrowing cost (financing cost) for the company, over the life of the bonds.

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