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Exam F2 Topic 1 Question 106 Discussion

Actual exam question for CIMA's F2 exam
Question #: 106
Topic #: 1
EF has redeemable 10% bonds which are currently trading at $94.00 for each $100 of nominal value. The bonds can be redeemed at par in five years' time. The corporate income tax rate is 22%.
The present value of the cash flows associated with $100 nominal value of these bonds at a discount rate of 7% is $9.28.
Calculate the post tax cost of debt.
Give your answer as a percentage to one decimal place.
%

Suggested Answer:

9.4, 9.3, 9.39, 9.40

by Hamiltion at Jan 25, 2026, 11:00 PM

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