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Gronseth Drywall Systems is considering issuing a new bond. The bond will have a $ 1 , 0 0 0 par value and flotation costs

Gronseth Drywall Systems is considering issuing a new bond. The bond will have a $1,000 par value and flotation costs will be $30 per bond. Bond has a 9% coupon rate, 16 years till maturity and currently trades at $1,250. Assume annual coupon payments, and calculate the before-tax cost of debt without flotation costs.

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