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samualson samualson
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5 years ago
QRM, Inc.'s marginal tax rate is 35%. It can issue 10-year bonds with an annual coupon rate of 7% and a par value of $1,000. After $12 per bond flotation costs, new bonds will net the company $966 in proceeds. Determine the appropriate after-tax cost of new debt for the firm to use in a capital budgeting analysis.
A) 2.62%
B) 4.87%
C) 7.50%
D) 7.8%
Textbook 
Foundations of Finance

Foundations of Finance


Edition: 9th
Authors:
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DeanaRayDeanaRay
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samualson Author
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#2
5 years ago
Smart ... Thanks!
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