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    MrKimball's Avatar
    MrKimball Posts: 1, Reputation: 1
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    #1

    May 8, 2010, 06:28 PM
    A2. (Comparing borrowing costs) Stephens Security has two financing alternatives: (1)
    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 yield)?
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    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    May 12, 2010, 10:31 PM

    Please see the guidelines for posting homework problems:
    https://www.askmehelpdesk.com/arts-l...-b-u-font.html
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