A firm has a 1000 face value bond that could be issued for, Financial Management

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A firm has a 1000 face value bond that could be issued for

A firm has a $1,000 face value bond that could be issued for $912 with 1% of issue price charged for flotation costs. The bond has a 5% coupon with 15 year maturity. If the firm’s tax rate is 30%, what is the appropriate cost of this debt?

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Financial Management: A firm has a 1000 face value bond that could be issued for

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Financial Management: A firm has a 1000 face value bond that could be issued for

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