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KatyDid Clothes Has a $150 Million ($1000 Face Value) 15-Year

Question 59

Multiple Choice

KatyDid Clothes has a $150 million ($1000 face value) 15-year bond issue selling for 86% of par that carries a coupon rate of 8%, paid semi-annually. What would be KatyDid's before-tax component cost of debt?


A) 4.90%
B) 8.13%
C) 9.80%
D) 7.09%

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