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Wind Power Systems Has 20-Year,semi-Annual Bonds Outstanding with a 5

Question 14

Multiple Choice

Wind Power Systems has 20-year,semi-annual bonds outstanding with a 5 percent coupon.The face amount of each bond is $1,000.These bonds are currently selling for 114 percent of face value.What is the company's pre-tax cost of debt?


A) 3.98 percent
B) 4.42 percent
C) 4.71 percent
D) 5.36 percent
E) 5.55 percent

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