1 to help finance a major expansion castro chemical company, Ask an Expert

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1. To help finance a major expansion, Castro Chemical Company sold a noncallable bond several years ago that now has 20 years to maturity. This bond has a 9.25% annual coupon, paid semiannually, sells at a price of $1,025, and has a par value of $1,000. If the firm's tax rate is 40%, what is the component cost of debt for use in the WACC calculation? Do not round your intermediate calculations.

2. What is the duration of bond quoted at $98.50, whose value falls to $95.91 if rates rise by 75 bps?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92774258

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