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Kenny Enterprises has just issued a bond with a par value of $1,000, a maturity of twenty years, and a coupon rate of 11.2% with semiannual payments.  What is the cost of debt for Kenny Enterprises if the bond sells at the following prices?  What do you notice about the price and the cost of debt?  

 

a.  $982.06

b.  $1,000

c.  $1,062.41

d.  $1,132.35

    • 8 years ago
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