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Buchanan Corp. is refunding $12 million worth of 10% debt. The new bonds will be issued for 8%. The corporation's tax rate is 35%. The

Buchanan Corp. is refunding $12 million worth of 10% debt. The new bonds will be issued for 8%. The corporation's tax rate is 35%. The call premium is 9%. What is the net cost of the call premium? a) $390,000 b) $1,080,000 c) $702,000

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