Example 2: Cost of debt Problem Suppose the ABC Company can issue bonds...

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Finance

Example 2: Cost of debt
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Suppose the ABC Company can issue bonds with a face value of $1,000, a coupon rate of 5 percent (paid semi-annually), and 10 years to maturity at $980 per bond. If the ABC Company's marginal tax rate is 30 percent, what is its cost of debt?
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