In the after cost of debt formula, what rate would you use for the cost of debt for a firm with 8% outstanding coupon bonds and a yield to maturity of 6.5%?
Select one:
a. 6.5%
b. 8.0%
c. 2.5%
d. 14.5%
YTM IS THE CURRENT RATE APPLICABLE ON NEW ISSUES
SO CORRECT ANSWER = a : 6.5% (THUMBS UP PLEASE)
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