The company is in a 40 percent tax bracket what will be the


(Cost of debt) Carraway Seed Company is issuing a $1,000 par value bond that pays 9 percent annual interest and matures in 11 years. Investors are willing to pay $955 for the bond. Flotation costs will be 13 percent of market value. The company is in a 40 percent tax bracket. What will be the firm's after-tax cost of debt on the bond?

The firm's after-tax cost of debt on the bond will be %. (Round to two decimal places.)

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Financial Management: The company is in a 40 percent tax bracket what will be the
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