Solved: As a result of current interest rates the bonds can be sold, Financial Management

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As a result of current interest rates the bonds can be sold

Currently, Warrant Industries can sell 15-year, $1000 par value bonds paying annual interest at 9% coupon rate. As a result of current interest rates, the bonds can be sold for $1070 each before incurring flotation costs of $20 per bond. The firm is in the 40% tax bracket. Using the approximate formula, what is the before tax cost of debt?

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Financial Management: As a result of current interest rates the bonds can be sold

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Financial Management: As a result of current interest rates the bonds can be sold

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