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You are going to issue some long-term debt in the forms of bonds that they will sell to investors for the first time. The bonds
You are going to issue some long-term debt in the forms of bonds that they will sell to investors for the first time. The bonds will have a 25-year maturity and carry a 12% coupon. The bonds must be sold at discount at 3%. In additiion, the company incur floatation cost fees at 2%.
If tax rate is 21%, what is after tax cost of debt?
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