Calculate pre-tax cost of debt capital

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Reference no: EM131967376

You know that the after-tax cost of debt capital for Bubbles Champagne is 7.20 percent.

Assume that the firm has only one issue of five-year bonds outstanding. The bonds make semiannual coupon payments and the marginal tax rate is 30 percent.

Calculate Pre-tax cost of debt capital.

What is the current price of the bonds if the coupon rate on those bonds is 10.29 percent? Current price of the bonds $

Reference no: EM131967376

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