Black Hill Inc. sells $100 million worth of 23-year to maturity 14.94% annual coupon bonds. The...
Black Hill Inc. sells $100 million worth of 23-year to maturity 14.94% annual coupon bonds. The net proceeds (proceeds after flotation costs) are $977 for each $1,000 bond. What is the before-tax cost of capital for this debt financing?
Round the answer to two decimal places in percentage form.
Homework Answers
Before tax cost of capital 15.31%
| Before tax cost of debt | =rate(nper,pmt,pv,fv) | |||
| = | 15.31% | |||
| Where, | ||||
| nper | = | 23 | ||
| pmt | = | $ 149.40 | ||
| pv | = | $ -977.00 | ||
| fv | = | $ 1,000.00 | ||
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