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Question 5 : CGT bs a major producer of chemicals and plastics, Including plasticgrocery bags, Styrofoam cups, and fertilizers. The firm's noncallable ( $ 1

Question 5:
CGT bs a major producer of chemicals and plastics, Including plasticgrocery bags, Styrofoam cups, and fertilizers. The firm's noncallable ( $1,000 par value),20-year, 725% bonds with semiannual payments are seling for $925. The firm's tax rate is 40%. New 20-year non-callable bonds can be issued at par, with a flotation cost of 2%. Determine the best estimate of the affer. tax cost of debt.
4.00%
544%
4.80%
406%
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