True Value Tools is considering a new, eight-year maturity bond offering. The investment bankers tell them that
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Question:
True Value Tools is considering a new, eight-year maturity bond offering. The investment bankers tell them that the issue costs will amount to two percent of the sale price of the bond. The firm's analysts should recognize that the issue costs will
- Alower the net proceeds per bond sold and lower the cost of debt financing.
- Blower the net proceeds per bond sold and raise the cost of debt financing.
- Craise the net proceeds per bond sold and lower the cost of debt financing.
- Draise the net proceeds per bond sold and raise the cost of debt financing.
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