Answered: A company has bonds which currently see…

A company has bonds which currently see for 82% of par. They pay a 6% coupon semi - annually, and have 12 years left to maturity. What is the cost of debt?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter9: The Cost Of Capital

Section: Chapter Questions

Problem 16P

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A company has bonds which currently see for 82% of par. They pay a 6% coupon semi - annually, and have 12 years left to maturity. What is the cost of debt?

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