Great Seneca Inc.sells $100 million worth of 25-year to maturity 13.76% annual coupon bonds. The net proceeds
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Question:
Great Seneca Inc.sells $100 million worth of 25-year to maturity 13.76% annual coupon bonds. The net proceeds (proceeds after flotation costs) are $992 for each $1,000 bond.The firm's marginal tax rate is 30%. What is the after-tax cost of capital for this debt financing?
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