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Gala2k [10]
3 years ago
10

Drogo, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 12 years to maturity that is qu

oted at 105 percent of face value. The issue makes semiannual payments and has an embedded cost of 6 percent annually. What is the company’s pretax cost of debt? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Business
1 answer:
ahrayia [7]3 years ago
6 0

Answer

The answer and procedures of the exercise are attached in the following image.

Explanation  

Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.  

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