Your firm has one outstanding bond issue. It has a $1000 par value, 8% coupon compounded annually, and 11 years to maturity. Debt represents 50% of this firm's target capital structure, and the firm has a 40% marginal tax rate. Its weighted after-tax component cost of debt is 2%. What is the PV of the outstanding bond issue?

A. $870.10
B. $1000.00
C. $1157.74
D. $1101.39
E. $633.64

Answer rating: 100% (QA)

The PV of the outstanding bond issue is 1000 The present value of a ... View the full answer