Costly corporation plans a new issue of bonds with a par value of $1000, a maturity of 21 years, and an annual coupon rate of 9.0%. flotation costs associated with a new debt issue would equal 7.0% of the market value of the bonds. currently, the appropriate discount rate for bonds of firms similar to costly is 12.0%. the firm's marginal tax rate is 30%. what will the firm's true cost of debt be for this new bond issue?
question 21 options:
14.53%
12.94%
9.84%
6.89%
9.06%
Answers: 2
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Costly corporation plans a new issue of bonds with a par value of $1000, a maturity of 21 years, and...
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