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To help finance a major expansion, Miami Development, Inc. sold a noncallable bond several years ago that now has 15 years to maturity. This bond
To help finance a major expansion, Miami Development, Inc. sold a noncallable bond several years ago that now has 15 years to maturity. This bond has a 9.75% annual coupon, paid semiannually, it sells at a price of $1,175, and it has a par value of $1,000. MDI's marginal tax rate is 34.00% and new bonds have 4% flotation costs. What component cost of debt should be used in the WACC calculation?
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