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Estimate the firm cost of debt

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Question - Estimate the firm's cost of debt

Assume that the only long term debt the firm has is 3.85% coupon bonds (due Dec   2031 issued at @100 each). 

The bonds are currently priced at $97 each and pay annually on 31 st December. Default rate is 0.5% and the expected loss rate in the event of default is 58%.

Reference no: EM132937662

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