finance its new project, Old Habits Inc. needs $5M that will be raised by issuing 6-year bonds. The interest rate on the bonds is 7% and the bonds will be issued at par. The flotation costs will be covered from the proceeds of the bond issue and are 2.5% of the gross proceeds. Find the NPV of flotation costs if the tax rate is 25%. "-93,751" "-61,020" "-40,474" "-81,775" "-102,743"
finance its new project, Old Habits Inc. needs $5M that will be raised by issuing 6-year bonds. The interest rate on the bonds is 7% and the bonds will be issued at par. The flotation costs will be covered from the proceeds of the bond issue and are 2.5% of the gross proceeds. Find the NPV of flotation costs if the tax rate is 25%. "-93,751" "-61,020" "-40,474" "-81,775" "-102,743"
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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finance its new project, Old Habits Inc. needs $5M that will be raised by issuing 6-year bonds. The interest rate on the bonds is 7% and the bonds will be issued at par. The flotation costs will be covered from the proceeds of the bond issue and are 2.5% of the gross proceeds. Find the NPV of flotation costs if the tax rate is 25%.
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"-93,751" |
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"-61,020" |
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"-40,474" |
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"-81,775" |
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"-102,743" |
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