KatyDid Clothes has a $180 million (face value) 25-year bond issue selling for 103 percent of...
KatyDid Clothes has a $180 million (face value) 25-year bond
issue selling for 103 percent of par that carries a coupon rate of
7 percent, paid semiannually.
What would be Katydid’s before-tax component cost of debt?
(Round your answer to 2 decimal places.)
Cost of Debt: ____.__%
Homework Answers
Calculating Yield to Maturity on Bond,
Using TVM Calculation,
I = [FV = 1,000, PV = -1,030, PMT = 35, N = 50]
I = 6.75%
Before-tax cost of Debt = 6.75%
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KatyDid Clothes has a $180 million (face value) 25-year bond
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