About the public issue and private placement

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Reference no: EM131060042

Voodoo Donuts can choose between the two following issues: A) A public issue of $10 million face value of 10-year debt. The interest rate on the debt would be 8.5% and the debt would be issued at face value. The underwriting spread would be 1.5% and other expenses would be $80,000. B) A private placement of $10 million face value of 10-year debt. The interest rate on the debt would be 9% and the total issuing expenses would be $30,000. Which deal should Voodoo Donuts choose?

Reference no: EM131060042

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About the public issue and private placement : Voodoo Donuts can choose between the two following issues: A) A public issue of $10 million face value of 10-year debt. The interest rate on the debt would be 8.5% and the debt would be issued at face value. The underwriting spread would be 1.5% and ..

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