Determine before tax cost of debt financing of bond

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Use the information below to determine before tax cost of debt financing of bond T.

The selling price of the bond (p) $1,086

Number of years to maturity (n) 12

Annual Coupon Rate (paid annually) 6.92%

Par Value 1,000

Floatation Costs $3.40

Before-Tax cost of debt financing % -?

a.5.94%

b. 6.44%

c. 8.74%

d. 12.54%

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Reference no: EM13728632

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