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Suppose a company will issue new 20-year debt with a par value of &1,000 and a...

Suppose a company will issue new 20-year debt with a par value of &1,000 and a coupon rate of 9%, paid annually. the issue price will be $1,000. The tax rate is 40%. If the flotation cost is 2% of the issue proceeds, then what is the after-tax cost of debt? What if the flotation costs were 10% of the bond issue?

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