Carraway Seed Company is issuing a
​1,000
par value bond that pays
6
percent annual interest and matures in
8
years. Investors are willing to pay
​$935
for the bond. Flotation costs will be
11
percent of market value. The company is in a
20
percent tax bracket. What will be the​ firm's after-tax cost ofdebt on the​ bond?
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