Long description

1 Finding the Before-Tax Cost of Debt
2 Par value negative 1000 dollars
3 Coupon interest rate 6 percent
4 Interest payments per year 1
5 Interest payment negative 60 dollars
6 Number of years to maturity 20
7 Net proceeds from sale of bond 980.00 dollars
8 Before-tax cost of debt 6.177 percent

Entry in Cell B8 equal to sign RATE(B6 times B4,B5,B7,B2,0).

The minus sign appears before the 1,000.00 dollars in B2 and the 60 dollars in B5 because these values are cash outflows for the corporation.

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