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Compute the before - tax cost of debt for a planned new issues of bonds. The annual interest in dollars is ( 7 . 2

Compute the before-tax cost of debt for a planned new issues of bonds.
The annual interest in dollars is (7.2%* $1,000par)= $72
The par value of the bonds is $1,000
The flotation costs amount to $15.00
The net proceeds of the bond is $1,000Par - $15.00Float = $985
The bonds will mature in twenty-five years
The firm's tax rate is 21%
Note: Enter your answer in percentage terms, but don't include the percent sign, and go out two decimal places (e.g. enter 6.51 for 6.51%).

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