Cost of debt. Dunder-Mifflin, Inc. (DMI) is selling 600,000 bonds to raise money for the publication of new magazines in the coming year. The bond will pay a coupon rate of 8.8% with semiannual payments and will mature in 30 years. Its par value is $100. What is the cost of debt to DMI if the bonds raise the following amounts (ignoring issuing costs)? a. $57,864,000 b. $53,136,000 c. $65,946,000 d. $81,030,000 a. What is the cost of debt to DMI if the bonds raise $57,864,000? % (Round to two decimal places.) b. What is the cost of debt to DMI if the bonds raise $53,136,000? % (Round to two decimal places.) c. What is the cost of debt to DMI if the bonds raise $65,946,000? % (Round to two decimal places.) d. What is the cost of debt to DMI if the bonds raise $81,030,000? % (Round to two decimal places.)
Cost of debt. Dunder-Mifflin, Inc. (DMI) is selling 600,000 bonds to raise money for the publication of new magazines in the coming year. The bond will pay a coupon rate of 8.8% with semiannual payments and will mature in 30 years. Its par value is $100. What is the cost of debt to DMI if the bonds raise the following amounts (ignoring issuing costs)? a. $57,864,000 b. $53,136,000 c. $65,946,000 d. $81,030,000 a. What is the cost of debt to DMI if the bonds raise $57,864,000? % (Round to two decimal places.) b. What is the cost of debt to DMI if the bonds raise $53,136,000? % (Round to two decimal places.) c. What is the cost of debt to DMI if the bonds raise $65,946,000? % (Round to two decimal places.) d. What is the cost of debt to DMI if the bonds raise $81,030,000? % (Round to two decimal places.)
Chapter9: The Cost Of Capital
Section: Chapter Questions
Problem 16P
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