Sincery Station Corp needs to raise $ 549000 to improve its manufacturing plant. It has decided to issue 1000 par value bond with an annual coupon rate of 10.3 percent with interest paid semiannually and a 10 yrs maturity. Investors require a rate of return of 7.6%.
A) Compute the market value of the bonds
B) How many bonds will the firm have to issue to receive the needed funds?
What is the firm after tax- cost f debt if the firm tax rate is 34%?