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* * ANSWER BOTH PART A AND PART B ! * * flotation costs and the cost of debt In March of 2 0 2
ANSWER BOTH PART A AND PART B
flotation costs and the cost of debt In March of PepsiCo, Inc. PEP sold $ million worth of year coupon bonds that pay semiannual interest. At the time the bonds were issued, the
market paid $ per bond and the flotation cost was $ per bond. Pepsi's corporate tax rate is
a Ignoring flotation costs, what is Pepsi's beforetax and aftertax costs of debt?
b Considering flotation costs, what is Pepsi's beforetax and aftertax costs of debt?
a Ignoring flotation cost, Pepsi's beforetax cost of debt is Round to two decimal places.
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