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Manal Elkhoshkhany
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A2 (Comparing borrowing costs) Stephens Security has two financing

Customer Question

A2 (Comparing borrowing costs) Stephens Security has two financing alternatives: (1) A publicly
placed $50 million bond issue. Issuance costs are $1 million, the bond has a 9% coupon paid semiannually, and the bond has a 20-year life. (2) A $50 million private placement with a large pension fund. Issuance costs are $500,000, the bond has a 9.25% annual
coupon, and the bond has a 20-year life. Which alternative has the lower cost (annual percentage

Answer in an excel spreadsheet please
Submitted: 5 years ago.
Category: Finance
Expert:  Manal Elkhoshkhany replied 5 years ago.

Hello again :)

 

Please click on the following link:

 

http://www.box.net/shared/bkcu1s92fr5iom4y1bo8

 

Regards,

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