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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% * $1,000par) = $72 The
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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