Question: Information for 7 - 1 5 . Acme, Inc., asks you to evaluate an investment project. The firm is in the 2 2 % tax

Information for 7-15. Acme, Inc., asks you to evaluate an investment project. The firm is in the 22% tax bracket and raises capital according to the following mix: 40% debt, 15% preferred, and 45% common. What is the before-tax cost of debt if it issues 30-year semi-annual coupon bonds at face value, the coupon rate is 6.5% and the flotation cost is $35 per bond?

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