Question on net cost of call premium

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Reference no: EM1349420

Buchanan Corp. is refunding $12 million worth of 10% debt. The corporation's tax rate is 35%. The call premium is 9%. What is the net cost of the call premium? Please show ALL work of how the answer was composed.

A) $390,000
B)$1,080,000
C)$600,000
D) $702,000

Reference no: EM1349420

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Question on net cost of call premium : Buchanan Corp. is refunding $12 million worth of 10% debt. The corporation's tax rate is 35%. The call premium is 9%. What is the net cost of the call premium? Please show ALL work of how the answer was composed.

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