What is the firm after taxed cost of debt the tax rate

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Smith stationary Ltd needs to raise $500,000 to improve it's a plant. it has decided to issue a $1,000 face value bond with a 8% annual coupon rate paid smi annually and a 5 year maturity. the investors require 10% rate of return.

Question 1: Calculate the price of this bond. How many bonds need to be issued to receive the required amount of fund?

Question 2: What is the firm after taxed cost of debt given the tax rate is 30%.

Reference no: EM132517941

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