A company has outstanding 20-year non-callable bonds with a face value of $1,000, an 11% annual coupon,

Question:

A company has outstanding 20-year non-callable bonds with a of $1,000, an 11% annual and a market price of $1,294.54. If the company was to issue new debt, what would be a reasonable estimate of the interest rate on that debt? If the company's tax rate is 40%, what is its after-tax cost of debt?
Why isn't the rate a reasonable estimate of the interest rate?
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...