You know that the after-tax cost of debt capital for, Ask an Expert

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You know that the after-tax cost of debt capital for Bubbles Champagne is 6.30 percent. Assume that the firm has only one issue of five-year bonds outstanding. The bonds make semiannual coupon payments and the marginal tax rate is 30 percent.

Calculate Pre-tax cost of debt capital. (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25%.)

Pre-tax cost of debt capital= 9%

What is the current price of the bonds if the coupon rate on those bonds is 9.00 percent?

Current price of the bonds= ?

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Financial Management, Finance

Category:- Financial Management
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