Question
Ezally Corp. is investing in a new machine that will be financed by issuing new 25-year, $1,000 par, 6% semiannual coupon bonds. The bonds are
Ezally Corp. is investing in a new machine that will be financed by issuing new 25-year, $1,000 par, 6% semiannual coupon bonds. The bonds are currently selling in the market for $980. Flotation costs on newly issued bonds are $80. The corporations marginal tax rate is 35%. What is the post-tax cost of debt for the newly-issued bonds?
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ISE Financial Markets And Institutions
Authors: Anthony Saunders, Marcia Cornett, Otgo Erhemjamts
8th International Edition
1265561435, 9781265561437
