Pharoah Ltd. has issued bonds that never require the principal amount to be repaid to investors. Correspondingly, Pharoah must make interest payments into the infinite future. If the bondholders receive annual payments of $82 and the current price of the bonds is $820.00. What is the pre-tax cost of this debt? (Round answer to 2 decimal places, e.g. 15.25%.) Pre-tax cost of debt Type your answer here %
Pharoah Ltd. has issued bonds that never require the principal amount to be repaid to investors. Correspondingly, Pharoah must make interest payments into the infinite future. If the bondholders receive annual payments of $82 and the current price of the bonds is $820.00. What is the pre-tax cost of this debt? (Round answer to 2 decimal places, e.g. 15.25%.) Pre-tax cost of debt Type your answer here %
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Pharoah Ltd. has issued bonds that never require the principal amount to be repaid to investors. Correspondingly, Pharoah must make interest payments into the infinite future. If the bondholders receive annual payments of $82 and the current price of the bonds is $820.00.
What is the pre-tax cost of this debt? (Round answer to 2 decimal places, e.g. 15.25%.)
| Pre-tax cost of debt | Type your answer here | % |
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