FINA issued 30-year bond 5 years ago. The current market value of the debt is $50M. The face value of the bond is $44.5M. The coupon rate is 6%. The bond pays coupon semiannually. What is the current cost of debt? 2.90% 2.56% 5.12% O 5.80%

FINA issued 30-year bond 5 years ago. The current market value of the debt is $50M. The face value of the bond is $44.5M. The coupon rate is 6%. The bond pays coupon semiannually. What is the current cost of debt? 2.90% 2.56% 5.12% O 5.80%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 1P

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Question

FINA issued 30-year bond 5 years ago. The current market value of the debt is $50M. The face value of the bond is $44.5M. The
coupon rate is 6%. The bond pays coupon semiannually. What is the current cost of debt?
2.90%
2.56%
5.12%
5.80%

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