Problem:
Stock Stream has decided to offer a new bond. Its investment banker has informed it that the 10-year bonds will have a face value of $1,000 and coupon rate of 10% compounded quarterly, can be sold for $1075, but the investment bank will charge a $14 a bond in floatation costs.
Requirement:
Question: What is the cost of debt for Stock Stream if their tax rate is 30%?
Note: Please show guided help with steps and answer.