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Gibson Industries is issuing a $1,000 par value bond with an 8% annual interest coupon rate that matures in 11 years. Investors are willing to

Gibson Industries is issuing a $1,000 par value bond with an 8% annual interest coupon rate that matures in 11 years. Investors are willing to pay $972, and flotation costs will be 9%. Gibson is in the 34% tax bracket. What will be the after-tax cost of new debt for the bond?

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