A firm has bonds issued with 8% coupon paid annually, 15 years to maturity,and priced...

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Finance

  1. A firm has bonds issued with 8% coupon paid annually, 15 years to maturity,and priced at 102.5% to face value. If the tax rate is 35%, what is the effective cost of debt?

    A.

    5.0%

    B.

    5.2%

    C.

    5.3%

    D.

    8.0%

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