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What is firm cost of debt before considering taxes

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Reference no: EM132659490

Problem 1: Your firm has 400,000 semi-annual bonds outstanding. If the current market price is $1120, the annual coupon rate is 6%, the face value is $1000 and they mature in 7 years, what is your firm's cost of debt before considering taxes?

Option 1: 2%

Option 2: 4%

Option 3: 6%

Option 4: $400,000,000

Option 5: $448,000,000

Reference no: EM132659490

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