Carraway Seed Company is issuing a $1,000 par value bond that pays 7 percent annual interest and
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Carraway Seed Company is issuing a $1,000 par value bond that pays 7 percent annual interest and matures in 15 years. Investors are willing to pay $850 for the bond. Flotation costs will be 3 percent of market value. The company is in a 21 percent marginal tax bracket. What will be the firm’s after-tax cost of debt on the bond?
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850 1003 82450 the net pr...View the full answer
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Related Book For 
Foundations Of Finance
ISBN: 9780135160619
10th Edition
Authors: Arthur J. Keown, John H. Martin, J. William Petty
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