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Finance

1. Company A's 10 percent coupon rate, quarterly payment, $1,000 par value bond, which matures in 10 years, currently sells at a price of $950. The company's tax rate is 38 percent. Based on the nominal interest rate, what is the firm's cost of debt? Show your calculations

2. Consider a $1,000 par value bond with a 7.5 percent coupon. The bond pays interest semi-annually. There are 9 years remaining until maturity. What is the current yield on the bond assuming that the required return on the bond is 9 percent with semiannual compounding? Show your calculations.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91945427

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