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Three years ago, the Fairchildress Co. issued 20-year, 7.75 percent semiannual coupon bonds at par. Today,...
Three years ago, the Fairchildress Co. issued 20-year, 7.75 percent semiannual coupon bonds at par. Today, the bonds are quoted at 102.6. What is this firm's pretax cost of debt?
Solutions
Expert Solution
Firm's pre tax cost of debt:
Firm's pre tax cost of debt = 7.48%
Workings:
jeff jeffy answered 1 year agoRelated Solutions
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Settlement Date= 1/1/2000
Maturity Date= 1/1/2018
Annual Coupon Rate =7.10%
Coupon per Year=2
Face Value(%of Par)=100
Bond Price (%of Par)=105
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Information
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