What is the after-tax cost of internal debt

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A corporate bond has a face value of $1,000 and pays annual coupon at rate of 9%. The bond matures in 14 years and has a current market price of $946. If the corporation sells more bonds it will incur flotation costs of 5.5% per bond. What is the after-tax cost of internal debt if the corporate tax rate is 35%?

Reference no: EM131592993

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