The Visadrone Surveillance Technologies, Inc. management has been told by their investment banker that the firm...

 

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The Visadrone Surveillance Technologies, Inc. management has been told by their investment banker that the firm could issue new bonds at par with a coupon rate of 9%. Each of the new bonds would have a face value of $1,000, pay interest once per year, and would have an initial maturity of 20 years. The investment banks would charge flotation costs (F) of 2%. If the firm's marginal tax rate is 21%, what is the firm's after-tax cost of bond debt implied by this information? (Be sure to round your answer to the same number of decimal places as the answer options.) The Visadrone Surveillance Technologies, Inc. management has been told by their investment banker that the firm could issue new bonds at par with a coupon rate of 9%. Each of the new bonds would have a face value of $1,000, pay interest once per year, and would have an initial maturity of 20 years. The investment banks would charge flotation costs (F) of 2%. If the firm's marginal tax rate is 21%, what is the firm's after-tax cost of bond debt implied by this information? (Be sure to round your answer to the same number of decimal places as the answer options.)