ango Enterprises has issued 100,000 coupon bonds, with maturity of eight years. Each bond sells for $1,075. The bonds pay semi-annual coupons of 9% on face value of $1,000. What is Tango’s cost of debt? Select one: a. 3.86% b. 6.57% c. 7.15% d. 7.28% e. 7.73%

EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter6: Bonds (debt) - Characteristics And Valuation
Section: Chapter Questions
Problem 12PROB
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12-3

Tango Enterprises has issued 100,000 coupon bonds, with maturity of eight years. Each bond sells for $1,075. The bonds pay semi-annual coupons of 9% on face value of $1,000. What is Tango’s cost of debt?

Select one:
a. 3.86%
b. 6.57%
c. 7.15%
d. 7.28%
e. 7.73%
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