Suppose a company will issue new 20 year debt with a par value of $1050...
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Finance
Suppose a company will issue new 20 year debt with a par value of $1050 and a coupon rate of 9%, paid semi-annually. The tax rate is 40%. If the floating cost is 2% of the issue proceeds, then what is the after tax cost of debt? Disregard the tax shield from the amortization of floating costs.
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