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

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Reference no: EM131982700

(Cost of debt) Carraway Seed Company is issuing a $1,000 par value bond that pays 9 percent annual interest and matures in 9 years. Investors are willing to pay $975 for the bond. Flotation costs will be 11 percent of market value. The company is in a 30 percent tax bracket. What will be the firm's after-tax cost of debt on the bond? The firm's after-tax cost of debt on the bond will be ___%

Reference no: EM131982700

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