Posted: November 5th, 2022
(Individual or component cost of capital) Compute the cost of capital for the firm for the following: a) A bond that has a $1,000 par value (face value) and a contract or coupon interest rate of 10.1%. The bonds have a current market value of $1,130 and will mature in 10 years. The firms marginal tax rat is 34%.
The cost of capital from this bond debt is __ % (Round to two decimal places)
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