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The firm can raise an unlimited amount of debt by selling 1,000,000, 8% coupon interest, 20 years bonds on which annual interesr payment will be
The firm can raise an unlimited amount of debt by selling 1,000,000, 8% coupon interest, 20 years bonds on which annual interesr payment will be made. It is currently selling for 1,050. To sell the issue, an average discount of Php50 per bond would have to be given. The firm must also pay flotatiin costs of Php50 pero bond
What is the cost of debt if the tax bracket is 30%?
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