What will be the firm after tax cost of debt on a bond

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Carraway seed company is issuing a $1000 par value bond that pays 7% annual interset and matures in 15 years. Investors are willing to pay $850 for the bond. Flotaion costs will be 3% of market value. The company in in a 30% marginal tax bracket. What will be the firm's after tax cost of debt on a bond?

Reference no: EM131337936

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