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Problem 9.2: ABC Corp. wants to issue perpetual debt to raise capital. It plans to pay a coupon of $90 per year on each bond

Problem 9.2: ABC Corp. wants to issue perpetual debt to raise capital. It plans to pay a coupon of $90 per year on each bond with par value of $1,000. Consols of a comparable firm with a coupon of $100 per year are selling at $1,050. What is the cost of debt capital (i.e., yield to maturity) for ABC? What will be the price at which it will issue its consols?

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