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A small corporation is considering a bond issue. The amount of stockholders' equity is $ 2 5 0 , 0 0 0 . The corporation

A small corporation is considering a bond issue. The amount of stockholders' equity is $

250, 000 .

The corporation projects income before bond interest and taxes of $

60, 000 .

The corporate income tax rate is

20

percent. If $

125, 000

of bonds is issued at

10

percent, what is the rate of profit on stockholders'

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