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vikingblood vikingblood
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A year ago
XYZ Inc. is planning a $200,000 90-day commercial paper issue. The issue is sold for $193,500. There is a flotation cost of $1,500. The corporate tax rate is 35%. (Assume a 365-day year.) Which of the following statements is correct?


▸

The before-tax cost is 16.77%.



▸

The before-tax cost is 15.71%.



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The after-tax cost is 10.21%.



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The after-tax cost is 10.06%.

Textbook 
Financial Management: Theory and Practice

Financial Management: Theory and Practice


Edition: 4th
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rectorrector
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A year ago
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