Question: CK Inc., will issue new 1 5 - year, $ 1 , 0 0 0 par value, 9 % annual coupon bonds. The market price

CK Inc., will issue new 15-year, $1,000 par value, 9% annual coupon bonds. The market price of the bonds is $1,000 each, and the flotation cost is $50 per bond. What is the before tax cost of debt if the firm is in the 35% marginal tax rate?

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