The welovebondvaluation company needs to estimate the cost, Financial Management

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The welovebondvaluation company needs to estimate the cost

The WeLoveBondValuation Company needs to estimate the cost of debt in their WACC calculation. The 15-year bond issue would have $1,000 par value, 5% coupon rate, and pay interest semiannually. The bonds would sell for $800.20 per bond. SHOW ALL WORK on the TI BAII Plus Calculator.

a) What is the cost of debt?

b) If the marginal tax rate of the company is 21%, what is the after-tax cost of debt to be used in the WACC calculation?

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Financial Management: The welovebondvaluation company needs to estimate the cost

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Financial Management: The welovebondvaluation company needs to estimate the cost

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