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- 9-4. (Cost of debt) Carraway Seed Company is issuing a $1,000 par value bond that pays 7 percent annual interest and matures in 15

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- 9-4. (Cost of debt) Carraway Seed Company is issuing a $1,000 par value bond that pays 7 percent annual interest and matures in 15 years. Investors are willing to pay $850 for the bond. Flotation costs will be 3 percent of market value. The company is in a 21 percent marginal tax bracket. What will be the firm's after-tax cost of debt on the bond

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