General Auto Parts Corporation recently issued a 2-year bond with a face value of $20 million...
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General Auto Parts Corporation recently issued a 2-year bond with a face value of $20 million and a coupon rate of 5.5 percent per year (assume interest is paid annually). The subsequent cash flows to General Auto Parts were as follows: Principal Interest Total TODAY $18 million $18 million What was the cost of capital to General Auto Parts for the debt issue? YEAR 1 ($0.00 million) ($0.99 million) ($0.99 million) YEAR 2 ($20 million) ($0.99 million) ($20.99 million) General Auto Parts Corporation recently issued a 2-year bond with a face value of $20 million and a coupon rate of 5.5 percent per year (assume interest is paid annually). The subsequent cash flows to General Auto Parts were as follows: Principal Interest Total TODAY $18 million $18 million What was the cost of capital to General Auto Parts for the debt issue? YEAR 1 ($0.00 million) ($0.99 million) ($0.99 million) YEAR 2 ($20 million) ($0.99 million) ($20.99 million)
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Related Book For
Government and Not for Profit Accounting Concepts and Practices
ISBN: 978-1118983270
7th edition
Authors: Michael Granof, Saleha Khumawala, Thad Calabrese, Daniel Smith
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