Question: Battan Inc. is contemplating issuing a bond with a face value of $1,000, which will pay an interest rate of 8% per year. The company

Battan Inc. is contemplating issuing a bond with a face value of $1,000, which will pay an interest rate of 8% per year. The company expects investors to pay $910 for the 20-year bond. The float cost of the bond is $42.

What is the company's cost of debt? . Assume a 34% tax rate.

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