Question: Willco plc has 100,000 5% redeemable bonds in issue. Interest is paid annually on 31 December. The ex-interest market value of a bond on

Willco plc has 100,000 5% redeemable bonds in issue. Interest is paid

Willco plc has 100,000 5% redeemable bonds in issue. Interest is paid annually on 31 December. The ex-interest market value of a bond on 1 January 20X5 is 90 and the bonds are redeemable at a 10% premium on 31 December 20X9. Tax on profits is 30%. Required What is the cost of debt?

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