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The net proceeds proceeds after flotation costs are 985 for

Finance: Before and after-tax cost of debt financing

Question

Great Seneca Inc. sells $100 million worth of 23-year to maturity 6.50% annual coupon bonds. The net proceeds (proceeds after flotation costs) are $985 for each $1,000 bond. The firm's marginal tax rate is 40%. What is the after-tax cost of capital for this debt financing?

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Finance Basics: The net proceeds proceeds after flotation costs are 985 for

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Finance Basics: The net proceeds proceeds after flotation costs are 985 for

Reference No:- TGS02195389

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