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This Tutorial contains excel sheet P 11-1
Eric has another get-rich-quick idea , but needs funding to support it . He chooses an all-debt funding scenario . He will borrow $ 3683 from Wendy , who will charge him 7 % on the loan . He will also borrow $ 3165 from Bebe , who will charge him 9 % on the loan , and $ 2152 from Shelly , who will charge him 15 % on the loan . What is the weighted average cost of capital for Eric ?
P11-2
Question : Grey ’ s pharmaceuticals has a new project that will require funding of $ 13.0 million . The company has decided to pursue an all-debt scenario . Grey ’ s has made agreements with four lenders for the needed financing . These lenders will advance the following amounts at the interest rates shown :
P11-3
Question : Cost of debt . Kenny Enterorises has just issused a bond with a par value of $ 1,000 , a maturity of twenty years , and a coupon rate of 9.4 % with semiannual payments . What is the cost of debt for Kenny Enterprises if the bond sells at the following prices ? What do you nitice about the price and the cost of debt ?
a . What is the cost of debt for Kenny Enterprises if the bond sells at $ 941.16 ?