Compute the market value

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Corporation decides to raise 500,000 for improvements to its manufacturing plant.It has decided to issue a 1000 par value bond w/14% annual coupon rate and 10 year maturity.

The investors require 9% rate return

a. compute the market value
b. whats the netprice to be if flotation costs are 10.5% of market price
c. how many bonds will the corportation need to issue to receive the needed funds
d. what is the corporations agter tax cost of debt if it average tax rate is 25%and marginal tax rate is 34%

 

Reference no: EM13296815

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