Perpetual Ltd. has issued bonds that never require the principal amount to be repaid to investors. Correspondingly,
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Question:
Perpetual Ltd. has issued bonds that never require the principal amount to be repaid to investors. Correspondingly, Perpetual Ltd must make interest payments into the infinite future. If the bondholders receive annual payments of $85 and the current price of the bonds is $992.35, what is the after-tax cost of this borrowing for Perpetual Ltd if the corporate tax rate is 30 per cent
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