What is the cost of debt to the firm

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Reference no: EM131594964

A firm plans to issue a $1,000 par value, 10-year bond with a 10% annual coupon rate. The bond is currently selling for $900. What is the cost of debt to the firm?

Hint: Solve for the Yield to Maturity (interest rate) of the bond.

11.75%

12.85%

17.63%

15.70%

16.77%

Reference no: EM131594964

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