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Business, 18.12.2019 03:31 Arealbot

Costly corporation plans a new issue of bonds with a par value of $1000, a maturity of 21 years, and an annual coupon rate of 9.0%. flotation costs associated with a new debt issue would equal 7.0% of the market value of the bonds. currently, the appropriate discount rate for bonds of firms similar to costly is 12.0%. the firm's marginal tax rate is 30%. what will the firm's true cost of debt be for this new bond issue?

question 21 options:

14.53%

12.94%

9.84%

6.89%

9.06%

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Answers: 2

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Costly corporation plans a new issue of bonds with a par value of $1000, a maturity of 21 years, and...

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