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  3. c. mrm ltd has a ksh. 4,000,000 irredeemable bond

c. MRM ltd has a ksh. 4,000,000 irredeemable bond with an interest rate of 12%....

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Question

Accounting

c. MRM ltd has a ksh. 4,000,000 irredeemable bond with an interest rate of 12%. The corporation tax applicable to the company is 30%.

Required:

Calculate the after-tax cost of debt to MRM (2 marks)

Define the following terms (8 marks)

i. Par or Face Value

ii. Coupon Rate

iii. Maturity Date

iv. Required Return

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