A corporate bond has a face value of 1000 and a coupon rate

Reference no: EM13596052

A corporate bond has a face value of $1,000 and a coupon rate of 6.5%. The bond matures in 10 years and has a current market price of $985. If the corporation sells more bonds it will incur flotation costs of $36 per bond. If the corporate tax rate is 34 %, what is the after tax cost of debt capital?

Reference no: EM13596052

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