Finance Assignment | Professional Writing
May 27th, 2020
(Cost of debt)
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Finance Assignment | Professional Writing
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Carraway Seed Company is issuing a $1,000 par value bond that pays 9 percent annual interest and matures in 14 years. Investors are willing to pay $935 for the bond.
Flotation costs will be 12 percent of market value. The company is in a 40 percent tax bracket. What will be the firm’s after-tax cost of debt on thebond?
Please show all calculations