Ford wants to raise debt by issuing bonds. They were informed by their investment banking consultant that they would have to pay a commission of 2.0% of the selling price on new issues. The company currently has an 7% coupon rate bond issued, which pays interest semi-annually, will mature in 10 years, has a $1000 face value, and is currently trading at $1043.

Calculate the appropriate cost of debt for Ford?

Answer rating: 100% (QA)

To calculate the appropriate cost of debt for Ford we need to consider the yield to maturity YTM of ... View the full answer