Cost of debt Dunder-Miffin, Inc. (DMI) is selling 600,000 bonds to raise money for the...
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Cost of debt Dunder-Miffin, Inc. (DMI) is selling 600,000 bonds to raise money for the publication of new magazines in the coming year. The bond will pay a coupon rate of 12.4% with semiannual payments and will mature in 30 years. Its par value is $100. What is the cost of debt to DMI if the bonds raise the following amounts (ignoring issuing costs)? a. $57,858,000 b. $54,180,000 c. $68,328,000 d. $72,618,000
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