Solved: Temple is issuing a rm1000 par value bond that pays 8, Accounting Basics

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Temple is issuing a rm1000 par value bond that pays 8

Problem

Temple is issuing a RM1000 par value bond that pays 8% annual interest and matures in 15years. Investors are willing to pay Rm950 for the bond. Flotation costs will be 11% of market value. The company is in a 19% tax bracket. What will be the firm's after-tax cost of debt on the bond?

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Accounting Basics: Temple is issuing a rm1000 par value bond that pays 8

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Accounting Basics: Temple is issuing a rm1000 par value bond that pays 8

Reference No:- TGS02591784

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