Cost of debt with fees. Kenny Enterprises will issue a bond with a par value of $1,000, a maturity of twenty years, and a coupon rate of 12.3% with semiannual payments, and will use an investment bank that charges $30 per bond for its services. What is the cost of debt for Kenny Enterprises at the following market prices? a. $952.75 b. $1,006.13 c. $1,054.87 d. $1,126.51

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Cost of debt with fees. Kenny Enterprises will issue
a bond with a par value of $1,000, a maturity of
twenty years, and a coupon rate of 12.3% with
semiannual payments, and will use an investment bank
that charges $30 per bond for its services. What is the
cost of debt for Kenny Enterprises at the following
market prices?
a. $952.75
b. $1,006.13
c. $1,054.87
d. $1,126.51
Transcribed Image Text:Cost of debt with fees. Kenny Enterprises will issue a bond with a par value of $1,000, a maturity of twenty years, and a coupon rate of 12.3% with semiannual payments, and will use an investment bank that charges $30 per bond for its services. What is the cost of debt for Kenny Enterprises at the following market prices? a. $952.75 b. $1,006.13 c. $1,054.87 d. $1,126.51
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