The cost of debt that is relevant when companies are evaluating new investment projects in the marginal cost of the new debt to be raised to france the new project Consider the case of Cold Duck Brewing Company (Cold Duck): Cold Duck Brewing Company is considering issuing a new 20-year debt issue that would pay an annual coupon payment or so. Each bond in the issue would carry a $1.000 por value and would be expected to be sold for a price equal to its par value. Cold Duck's CFO has pointed out that the firm would incur a rotation cost of 1% when initially issuing the bond issue. Remember, the rotation costs will be the proceeds the firm will receive after issuing its new bonds. The firm's marginal federal-plus-state tax rate is 30%. To see the effect of notation costs on Cold Ducks after-tax cost of debt (generic), calculate the after-tax cost of the firm's debt issue with and without its flotation costs, and select the correct after tax costs (in percentage form) After-tax cost of debt without fotation cost: After-tax cost of debt with notation cost: This is the cost of debt, and it is different from the average cost of capital raised in the past. The cost of debt that is relevant when companies are evaluating new investment projects in the marginal cost of the new debt to be raised to france the new project Consider the case of Cold Duck Brewing Company (Cold Duck): Cold Duck Brewing Company is considering issuing a new 20-year debt issue that would pay an annual coupon payment or so. Each bond in the issue would carry a $1.000 por value and would be expected to be sold for a price equal to its par value. Cold Duck's CFO has pointed out that the firm would incur a rotation cost of 1% when initially issuing the bond issue. Remember, the rotation costs will be the proceeds the firm will receive after issuing its new bonds. The firm's marginal federal-plus-state tax rate is 30%. To see the effect of notation costs on Cold Ducks after-tax cost of debt (generic), calculate the after-tax cost of the firm's debt issue with and without its flotation costs, and select the correct after tax costs (in percentage form) After-tax cost of debt without fotation cost: After-tax cost of debt with notation cost: This is the cost of debt, and it is different from the average cost of capital raised in the past