Voodoo donuts can choose between the two following issues a, Ask an Expert

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Voodoo Donuts can choose between the two following issues: A) A public issue of $10 million face value of 10-year debt. The interest rate on the debt would be 8.5% and the debt would be issued at face value. The underwriting spread would be 1.5% and other expenses would be $80,000. B) A private placement of $10 million face value of 10-year debt. The interest rate on the debt would be 9% and the total issuing expenses would be $30,000. Which deal should Voodoo Donuts choose?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91784435

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