1Q. Carraway Seed Company is issuing a $ 1,000 par value bond that pays 8 percent annual...
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1Q. Carraway Seed Company is issuing a $ 1,000 par value bond that pays 8 percent annual interest and matures in 15 years. Investors are willing to pay $ 990 for the bond. Flotation costs will be 13 percent of market value. The company is in a 35 percent tax bracket. What will be the firm's after-tax cost of debt on the bond?
The firm's after-tax cost of debt on the bond will be __%. (Round to two decimal places.)
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