Question: Baba Co has in issue 75% bonds redeemable in five years time with a total nominal value of $4 million. The market value of each

Baba Co has in issue 75% bonds redeemable in five years time with a total nominal value of $4 million. The market value of each $100 bond is $10113. The corporation tax rate is 30%. Redemption will be at nominal value. Calculate the cost of debt of Baba Co.

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