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After-tax cost of debt on the? bond

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Carraway Seed Company is issuing a ?$1, 000 par value bond that pays 7 percent annual interest and matures in 14 years. Investors are willing to pay ?$970 for the bond. Flotation costs will be 11percent of market value. The company is in a 38 percent tax bracket. What will be the? firm's after-tax cost of debt on the? bond?

Reference no: EM132497892

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