A P1000 000.00 issue of 3%, 15-year bonds is sold at 95%. The miscellaneous initial expense of the financing were P20 000.00 and yearly expenses of P2000.00 is incurred. What is the true cost the company is paying for the money it borrowed? (Ans. 3.8%)
A P1000 000.00 issue of 3%, 15-year bonds is sold at 95%. The miscellaneous initial expense of the financing were P20 000.00 and yearly expenses of P2000.00 is incurred. What is the true cost the company is paying for the money it borrowed? (Ans. 3.8%)
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 4PB: Irving Inc. sold bonds with a $50,000, 10% interest, and 10-year term at $52,000. What is the total...
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A P1000 000.00 issue of 3%, 15-year bonds is sold at 95%. The miscellaneous initial expense of the financing were P20 000.00 and yearly expenses of P2000.00 is incurred. What is the true cost the company is paying for the money it borrowed? (Ans. 3.8%)
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