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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 2020 PepsiCo, Inc. (PEP) sold $750 million worth of 30-year 5.00% coupon bonds that pay semi-annual interest. At the time the bonds were issued, the
market paid $1,009.26 per bond and the flotation cost was $17.56 per bond. Pepsi's corporate tax rate is 21%.
a. Ignoring flotation costs, what is Pepsi's before-tax and after-tax costs of debt?
b. Considering flotation costs, what is Pepsi's before-tax and after-tax costs of debt?
a. Ignoring flotation cost, Pepsi's before-tax cost of debt is %.(Round to two decimal places.)
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