Delevig Energy Co. just issued 20-year, 10% coupon bonds with a flotation cost equal to 4.0% of

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Delevig Energy Co. just issued 20-year, 10% coupon bonds with a flotation cost equal to 4.0% of the $1,000 face value. The corporate tax rate is 21%. If the bonds are currently sold at $1,025/share, what is the firm's after-tax cost debt?

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Corporate Finance

ISBN: 9781265533199

13th International Edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe

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Posted Date: May 07, 2024 07:12 AM

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Delevig Energy Co. just issued 20-year, 10% coupon bonds with a flotation cost equal to 4.0% of

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To calculate the firms aftertax cost of debt we need to find the effective annual interest rate on t... View the full answer

Corporate Finance

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