The cost of debt
Thalin Inc. has decided to extend its current product line. To finance the project, the firms is considering issuing a ten-year, 10-percent coupon bond. The firm has made public that its target debt-to-equity ratio is 30-percent is not going to change in the foreseeable future. Two years ago the firm issued a 12-year, 10 percent coupon bond to finance a similar project. The current market price of the bond is $1065. What is Thalin cost of debt?