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Suppose a company will offer a new series of bonds that have a coupon of 3%, 20 years to maturity, and according to the Investment
Suppose a company will offer a new series of bonds that have a coupon of 3%, 20 years to maturity, and according to the Investment Banker, will net the firm $975 per bond with a par value of $1,000. What is the before and after cost of debt for this new issue? Assume a marginal tax of 40%.
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