Catnip Stores Has a $20 Million Bond Issue Outstanding That

question 22

Multiple Choice

Catnip Stores has a $20 million bond issue outstanding that currently has a market value of $18.6 million. The bonds mature in 6.5 years and pay semiannual interest payments of $30 each. What is the firm's pre-tax cost of debt?

• A) 6.99 percent
• B) 7.37 percent
• C) 7.58 percent
• D) 7.74 percent
• E) 7.80 percent

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Definitions:

Bipolar Disorder

An emotional disorder characterized by radical changes in mood, encompassing both manic or hypomanic highs and depressive lows.

Worthlessness

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Major Depressive Disorder

A mental health disorder characterized by persistent feelings of sadness, loss of interest in activities, and a range of physical and cognitive symptoms.

Elation

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