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A bond has a $15 million face value and a coupon rate of 9 percent. It has floatation costs of 5 percent of the face
A bond has a $15 million face value and a coupon rate of 9 percent. It has floatation costs of 5 percent of the face value. The bond matures in 10 years. The firms average tax rate is 30 percent and its marginal tax rate is 21 percent. Compute the after-tax cost of debt.
Please show full work with equation and each step to solve, thank you.
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