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Builtrite Furniture is considering sells bonds for a plant expansion. Currently, Builtrite believes that it could sell 20 year maturity, $1000 par value, 5 1/8%

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Builtrite Furniture is considering sells bonds for a plant expansion. Currently, Builtrite believes that it could sell 20 year maturity, $1000 par value, 5 1/8% coupon bonds after flotation costs for $1060. If Builtrite is in the 34% marginal tax bracket, what is the after-tax cost for the bonds? 4.64% 3.44% O 3.06% 5.21%

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