Builtrite furniture is considering sells bonds for a plant


Builtrite Furniture is considering sells bonds for a plant expansion. Currently, Builtrite believes that it could sell 15 year maturity, $1000 par value, 5 3/4% coupon bonds after flotation costs for $985.  If Builtrite is in the 34% marginal tax bracket, what is the after-tax cost for the bonds?

 

 

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Finance Basics: Builtrite furniture is considering sells bonds for a plant
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