Carraway Seed Company is issuing a $1,000 par value bond that pays 8 percent annual interest and matures in 9 years. Investors are willing to pay $935 for the bond. Flotation costs will be 9 percent of market value. The company is in a 30 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

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A: The calculation is:

Q: Brown Industries can sell 15 years, $1000 par value bonds paying annual interest at 12% coupon rate.…

A: Formulas:

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A: Given:

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