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Fairyland Inc. has a $6 million (face value) 30 year bond issue selling for 105.9 percent...

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Finance

Fairyland Inc. has a $6 million (face value) 30 year bond issueselling for 105.9 percent of par that pays an annual coupon of8.0%. What would be Fairyland’s before-tax component cost ofdebt?

Solving using the Financial Calculator App, Or, using Excel:=RATE(N,PMT,-PV,FV)

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Transcribed Image Text

Fairyland Inc. has a $6 million (face value) 30 year bond issueselling for 105.9 percent of par that pays an annual coupon of8.0%. What would be Fairyland’s before-tax component cost ofdebt?Solving using the Financial Calculator App, Or, using Excel:=RATE(N,PMT,-PV,FV)

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