Acompany is going to issue a $1,000 par value bond that pays a 7% annual coupon. the company expects investors to pay $942 for the 20-year bond. the expected flotation cost per bond is $42, and the firm is in the 34% tax bracket. compute the following: a)the yield to maturity on the firm’s bondsb)the firm’s after-tax cost of existing debtc)the firms after tax cost of new debt

it id the first and last option

the investment was $14,174.196

explanation:

a lump sum means that the father of the example made one deposit and leave it be.

we need to know the value of a capital that generated at 4.05% per year during 28 years the sum of $48,613.24

now clearing the formula to solve for capital we got:

and we reach the answer investment = $14,174.20

answerindustrial revolution;

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