Question: AB has a 5% redeemable bond in issue with a par value of $100. The bond is redeemable in five years' time at a 10%

AB has a 5% redeemable bond in issue with a par value of $100. The bond is redeemable in five years' time at a 10% premium. The bond is currently trading at 95% of its par value. AB pays tax at a rate of 30%. Which THREE of the following are cash flows that will be used to calculate the cost of AB's redeemable bonds? Question 9Answer a. $100 b. $5 c. $100(1 - 0.3) d. $110 e. $5(1 - 0.3) f. $95

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