Advance, inc., is trying to determine its cost of debt. the firm has a debt issue outstanding with 16 years to maturity that is quoted at 107 percent of face value. the issue makes semiannual payments and has a coupon rate of 10 percent. what is the company's pretax cost of debt?

R= 9.16%

Explanation:

Step 1. Given information.

Step 2. Formulas needed to solve the exercise.

The present value of r is considered taking into account the period of time of the exercise. In this case the period n=32 is because the amount is paid twice in a year, thus, n=16*2

Step 3. Calculation and Step 4. Solution.

Coupon = 10%*1000/2= 50

107%*1000 = 50*(1-1/(1+r/2)^32)/(r/2)+ 1000/(1+r/2)^32

R= 9.16%

c

explanation:

c because the item on a bank statement is also referred to as an account statement. in addition, it provides the beginning balance, ending balance, statement date, transaction date for each transaction, payee, customer name and address, statement period, the account holder's account number, and the bank's customer service number