AC will be issuing bonds with a total face value of P10,000,000 at an issue price of P9,900,000. It will incur issuance cost of P600,000. The bonds have a term of 10 years and a coupon rate of 12% payable quarterly. If the tax rate is 30%, what is the effective cost of the bonds using the interpolation method?

AC will be issuing bonds with a total face value of P10,000,000 at an issue price of P9,900,000. It will incur issuance cost of P600,000. The bonds have a term of 10 years and a coupon rate of 12% payable quarterly. If the tax rate is 30%, what is the effective cost of the bonds using the interpolation method?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 9P

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