Handy Man,Inc.has zero coupon bonds outstanding that mature in 8 years.The bonds have a face value of $1,000 and a current market price of $640.What is the company's pre-tax cost of debt?
A) 2.55 percent
B) 5.09 percent
C) 5.66 percent
D) 7.31 percent
E) 7.48 percent
Correct Answer:
Verified
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