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Issue costs will be 11 of the market value the company pays

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Belton is issuing a $100 par vlue bond that pays 7% annal interest and matures in 15 years. Investors are willing to pay $95.80 or the bond. Issue costs will be 11% of the market value. The company pays 18% in taxes. What will be the firms after tax cost of debt on the bond?

Reference no: EM13567906

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