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pharingsma
Dec 6, 2013, 11:54 AM
Long term debt with a 30 year maturity and a 12% coupon rate would make semiannual coupon payments. Bonds must be underpriced at a discount of 2.5% of face value and firm would have to pay flotation costs of 2.5% of face value. Tax rate is 33%. After tax cost of debt would be ______? It seems there is too much of some information and not enough of others. It does not give the original cost of the bond. I don't know where to start. Can anyone help?