Buchanan Corp is refunding $12 million worth of 10% debt. The new bonds will be issued at

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Buchanan Corp is refunding $12 million worth of 10% debt. The new bonds will be issued at 8%. The corporation’s tax rate is 35%. The call premium is 9%. What is the net cost of the call premium?

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Fundamentals of Corporate Finance

ISBN: 978-1259024962

6th Canadian edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim

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Question Posted: Feb 08, 2013 02:29 AM

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Buchanan Corp is refunding $12 million worth of 10% debt. The new bonds will be issued at

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Fundamentals of Corporate Finance

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