A facility requires 2500000 in debt capital the plan is to


A facility requires $2500000 in debt capital. The plan is to sell twenty-year bonds that pay 4.2 percent per year, payable quarterly, at a 3 percent discount on the face value. The facility has an effective tax rate of 35 percent per year. What is the total face value of the bonds required to obtain $2500000 and what is the effective annual after-tax cost of debt capital?

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Econometrics: A facility requires 2500000 in debt capital the plan is to
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