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Question 7. Arabian Pipes Co. (APC) is issuing a $5,000 par value bond that pays 6 percent annual interest and matures in 12 years. Investors

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Question 7. Arabian Pipes Co. (APC) is issuing a $5,000 par value bond that pays 6 percent annual interest and matures in 12 years. Investors are willing to pay $4,800 for the bond. Floatation costs will be 3 percent of market value. The Company is in a 15 percent tax bracket. What will be the firm's after-tax cost of debt on the bond

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