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(Cost of debt) Carraway Company is suing a $1,000 par value bonds that pays 7 percent annual interest and matures in 9 years. Investors are
(Cost of debt) Carraway Company is suing a $1,000 par value bonds that pays 7 percent annual interest and matures in 9 years. Investors are willing to pay $965 for the bond. Flotation costs will be 13 percemy of the market value. The company is in a 40 percent tax bracket. What will be the firm's after-tax cost of debt on the bond?
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The Essentials Of Machine Learning In Finance And Accounting
Authors: Mohammad Zoynul Abedin, M. Kabir Hassan, Petr Hajek, Mohammed Mohi Uddin
1st Edition
0367480816, 978-0367480813
