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Homework: Chapter 9 Homework Save Score: 0 of 1 pt 3 of 6 (4 complete) HW Score: 42.86%, 6 of 14 pts Problem 9-4 (similar
Homework: Chapter 9 Homework Save Score: 0 of 1 pt 3 of 6 (4 complete) HW Score: 42.86%, 6 of 14 pts Problem 9-4 (similar to) Question Help O (Cost of debt) Carraway Seed Company is issuing a $1,000 par value bond that pays 8 percent annual interest and matures in 11 years. Investors are willing to pay $980 for the bond. Flotation costs will be 9 percent of market value. The company is in a 39 percent tax bracket. What will be the firm's after-tax cost of debt on the bond? The firm's after-tax cost of debt on the bond will be %. (Round to two decimal places.)
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