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sergij07 [2.7K]
3 years ago
5

Mudvayne, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 11 years to maturity that is

quoted at 104 percent of face value. The issue makes semiannual payments and has an embedded cost of 4 percent annually. What is the company’s pretax cost of debt?

Business
1 answer:
ale4655 [162]3 years ago
7 0

Answer:

3.56%

Explanation:

In this question, we use the Rate formula which is shown in the spreadsheet.  

The NPER represents the time period.

Given that,  

NPER = 11 × 2 = 22 years

Present value = $1,000 × 104% = $1,040

Future value = $1,000

PMT = 1,000 × 4% × (6 months ÷ 12 months)  = $20

The formula is shown below:

= Rate(NPER;PMT;-PV;FV;type)

The present value come in negative

So, after solving this, the answer would be 3.56% ( 1.78 × 2)

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<h3>What are the factors affecting marketer success?</h3>

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Answer:

You may reach your long-term goals quicker by putting your cash into a savings account or certificate of deposit with a high interest rate, or by investing, especially if you don’t plan to use this money for at least five years — say you’re starting a college fund for your newborn. That way you’ll allow time to build up a positive return.

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2 years ago
Garcia manufacturing's april sales forecast projects that 5,000 units will sell at a price of $10.50 per unit. the desired endin
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Suppose that Walgreens (a major drug store chain) wants to introduce its own brand of cough medicine that is similar in contents
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