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Juan's Mirage, Inc. is undergoing a major expansion. They plan to finance this expansion by issuing new 10-year bonds with 6.0% coupon rate. The market
Juan's Mirage, Inc. is undergoing a major expansion. They plan to finance this expansion by issuing new 10-year bonds with 6.0% coupon rate. The market price of the bonds is $1,045. Flotation cost on the new bonds will be 1.0% of the market price. Juan's marginal tax rate is 30%. What is the after-tax cost of debt? Flotation NP FV N PMT PV 1/Y After-tax cost of debt
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