(Cost of debt) Carraway Seed Company is issuing a $1,000 par value bond that pays 11...
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(Cost of debt) Carraway Seed Company is issuing a $1,000 par value bond that pays 11 percent annual interest and matures in 12 years. Investors are willing to pay $970 for the bond. Flotation costs will be 13 percent of market value. The company is in a 39 percent tax bracket. What will be the firm's after-tax cost of debt on the bond? The firm's after-tax cost of debt on the bond will be %. (Round to two decimal places.) (Cost of debt) Carraway Seed Company is issuing a $1,000 par value bond that pays 11 percent annual interest and matures in 12 years. Investors are willing to pay $970 for the bond. Flotation costs will be 13 percent of market value. The company is in a 39 percent tax bracket. What will be the firm's after-tax cost of debt on the bond? The firm's after-tax cost of debt on the bond will be %. (Round to two decimal places.)
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