Cost of debt. Dunder-Mifflin, Inc. (DMI) is selling 600,000 coming year. The bond will pay a coupon rate of 15.1% with semiannual payments and will mature in 30 years. Its par value is $100. What is the cost of debt to DMI if the bonds raise the following amounts (ignoring issuing costs)? a. $58,806,000 b. $57,192,000 c. $64,230,000 d. $73,164,000

Cost of debt. Dunder-Mifflin, Inc. (DMI) is selling 600,000 coming year. The bond will pay a coupon rate of 15.1% with semiannual payments and will mature in 30 years. Its par value is $100. What is the cost of debt to DMI if the bonds raise the following amounts (ignoring issuing costs)? a. $58,806,000 b. $57,192,000 c. $64,230,000 d. $73,164,000

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter9: The Cost Of Capital

Section: Chapter Questions

Problem 16P

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