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Global products plans to issue long term bonds to raise funds to finance its growth. the company has existing bonds outstanding that are similar to
Global products plans to issue long term bonds to raise funds to finance its growth. the company has existing bonds outstanding that are similar to the new bonds it expects to issue. The existing bonds have a face value equal to $1000 mature in 10 years, pay $60 interest annually and are currently selling for $1077 each. Global's marginal tax rate is 40 percent. a. what should be the coupon rate on the new bonds issue? b. what is Global's after tax cost of debt?
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