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Currently, Warren Industries can sell 1 0 year , 1 0 0 0 0 $ - par - value bonds paying annual interest at a

Currently, Warren Industries can sell 10 year ,10000$-par-value bonds paying annual interest at a 14% coupon rate. Because current market rates for similar bonds are just under 14%, Warren can sell its bonds for $1030each; Warren will incur flotation costs of 35$ per bond. The firm is in the 23% tax bracket.

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