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Business, 01.03.2021 21:50 ryantrajean7

Suppose a company will issue new 20-year debt with a par value of $1,000 and a coupon rate of 9%, paid annually. The tax rate is 35%. If the flotation cost is 5% of the issue proceeds, then what is the after-tax cost of debt? Disregard the tax shield from the amortization of flotation costs.

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Suppose a company will issue new 20-year debt with a par value of $1,000 and a coupon rate of 9%, pa...
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