Question
GibsonIndustries is issuing a $1,000 par value bond with an 8% annual interest couponrate that matures in 11 years. Investors are willing to pay $972,
GibsonIndustries is issuing a $1,000 par value bond with an 8% annual interest couponrate that matures in 11 years. Investors are willing to pay $972, and flotationcosts will be 9%. Gibson is in the 34% tax bracket. What will be the after-taxcost of new debt for the bond?
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College Mathematics For Business Economics, Life Sciences, And Social Sciences
Authors: Raymond Barnett, Michael Ziegler, Karl Byleen, Christopher Stocker
14th Edition
0134674146, 978-0134674148
