Use the information below to determine before tax cost of debt financing of bond T.
The selling price of the bond (p) $1,086
Number of years to maturity (n) 12
Annual Coupon Rate (paid annually) 6.92%
Par Value 1,000
Floatation Costs $3.40
Before-Tax cost of debt financing % -?
a.5.94%
b. 6.44%
c. 8.74%
d. 12.54%
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