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The firm currently has one issue of bonds outstanding. The bondshave a par value of ?$1 comma 000 per? bond, carry a coupon rate of8 ?percent, have 14 years to? maturity, and are selling for ?$1,070. ?Nealon's common stock has a current market price of $ 36?,and the firm paid a ?$2.60 dividend last year that is expected toincrease at an annual rate of 6 percent for the foreseeable future.What is the cost of new debt financing to Nealon based on currentmarket prices after both taxes? (you may use a marginal tax rate of34 percent for your? estimate) and flotation costs of ?$30 per bondhave been? considered?
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