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Bezos Inc can sell 15 year $1000 par-value bonds paying annual interest at 10% coupon rate. As a result of current interest rates, the bonds
Bezos Inc can sell 15 year $1000 par-value bonds paying annual interest at 10% coupon rate. As a result of current interest rates, the bonds can be sold for $1010 each; flotation costs of $30 per bond will be incurred in this process. The firm is in the 40% tax bracket. Calculate the after-tax cost of debt for Bezo.
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