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What is the annual cost of debt to the company

Claus & Company is planning a zero coupon bond issue. The bond has a par value of $1,000, matures in 2 years, and will be sold at a price of $826.45. What is the annual cost of debt (YTM) to the company on this issue?

a. 4.0%

b. 6.0%

c. 8.0%

d. 10.0%

e. 12.0%

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Solution Preview :

Prepared by a verified Expert

Finance Basics: What is the annual cost of debt to the company

Reference No:- TGS0552355

Have a Question? (oR Write a Review)

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Solution Preview :

Prepared by a verified Expert

Finance Basics: What is the annual cost of debt to the company

Reference No:- TGS0552355

Recent Questions Asked Finance Basics

Q : Question-financial statement analysis

Q : Determine the risk free rate

Q : Future academic life and career

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Q : What is the annual cost of debt to the company

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