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Bards and yards has 10-year bonds outstanding

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Bards and Yards has 10-year bonds outstanding that carry an annual coupon of 8 percent. The bonds mature in 7 years and are currently priced at 108.4 percent of face value. What is the firm's pre-tax cost of debt?
Question 7 options:

1) 6.47 percent

2) 6.82 percent

3) 7.34 percent

4) 7.70 percent

5) 8.23 percent

Reference no: EM13696855

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